The trucking sector saw modest expansion in July despite larger global economic uncertainty and rising industry costs, according to ITS Logistics’ August ITS Supply Chain Report.
In addition, the drayage sector experienced the second-highest volume of U.S. imports ever recorded, coming in just 555 TEUs shy of the all-time high in May 2022. In warehousing, PPI rose to 153.982, hinting at a slight recovery following a sharp decline from May to June. Overall economic performance — although still strained by inflation and labor concerns — did cool down enough to satisfy markets.
“While capacity has tightened with ongoing carrier exits, the real story is that cost pressures remain significant and freight rates, broadly, are still challenged—just barely covering the bills,” says Josh Allen, chief commercial officer at ITS Logistics. “This isn’t broad-based recovery. The opportunities that exist are selective, shaped by tariff volatility and a shifting regulatory environment.”
Key takeaways:
· The Logistics Managers Index (LMI) revealed a reading of 59.2, with growth being driven by smaller logistics companies and demand for freight movement of frontloaded goods from ports and distribution centers. Smaller firms and upstream companies are what impacted activity in the supply chain during July, with both reporting higher inventories. Smaller companies confirmed swift expansion in inventory at 64.8, while upstream firms experienced an expansion of 58.5, versus the contraction among downstream companies at 47.6. The decline in stock levels across retailers was attributed to the intermittent nature of tariffs. Additionally, warehousing also saw a modest uptick in the Producer Price Index, reflecting early stabilizing and potential normalization of operational activity.
· Across the United States, the Top 10 import gateways all saw strong gains in import volumes — a rise that reflects traditional seasonal demand as well as suspected frontloading activity ahead of tariff policy changes. The convergence resulted in the second-highest import volume on record, just shy of post pandemic fueled operations in May of 2022.
· While capacity remains closely monitored by experts, fuel prices are a growing challenge across the freight industry. In one survey, more than half of U.S. transport and shipping firms reported spending at least 20% of their operating budget on fuel.
