Transportation pricing climbed to within striking distance of an all time high in June, according to the Logistics Managers' Index, a monthly survey of supply chain professionals. The transportation pricing component posted a reading of 92.4, just 3.6 points off the record set in May, on a scale where any number above 50 signals expansion.

Truck capacity kept shrinking alongside the price gains. The capacity reading fell to 30.8, down 90 basis points for the month and the seventh straight monthly decline. Utilization jumped in the other direction, climbing from 69.2 in the first half of June to 78.8 in the second half, an eight year high for the metric. Publicly traded truckload carriers say tighter regulatory enforcement has pulled meaningful capacity out of the market, and several told investors that contractual rates negotiated earlier in the year are no longer holding up as shippers get repriced.

The broader index, which also folds in inventory and warehousing data, registered 71.1 in June, up 1.6 points from May and the first reading above 70 since March 2022. Inventory levels rose 5.7 points as large retailers pulled goods forward ahead of the back to school season and new ocean shipping surcharges that took effect in July. Warehousing capacity slipped 3 points as warehouses absorbed the early restocking.

Survey respondents expect the tight conditions to persist, forecasting a 42.4 capacity reading, 75.8 for utilization, and 87 for pricing over the next 12 months. The data comes from a joint survey conducted by researchers at Arizona State, Colorado State, Florida Atlantic, Rutgers, and the University of Nevada, Reno, with the Council of Supply Chain Management Professionals.

Source: FreightWaves -- https://www.freightwaves.com/news/transportation-pricing-index-hovers-near-all-time-high-in-june