Trucking Capacity Declines: LMI Shows Shifting Trends

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6}#fwtv_9m3XeoHQhjw. fwtv-panel p{margin:0 0 12px}#fwtv_9m3XeoHQhjw. fwtv-transcript p{margin:0 0 12px}SummaryView TranscriptThe July Logistics Manager Index (LMI) reveals key shifts in the freight market.

While overall logistics costs decreased slightly month-over-month, transportation capacity is contracting at a faster rate, indicating a tightening market. FreightWaves experts break down how these numbers, alongside increased regulatory enforcement, will impact shippers and carriers heading into peak season. The Logistics Manager Index registered 68.

9% in July, down from 71. 7% in June but still nearly 7 points above the index’s all-time average of 61. 7%, according to a Aug. 5 Sonar market update delivered by FreightWaves analyst Julie. The three-month average for the LMI stood at 69. 8, placing July just 0. 9 points below that recent trend, while the index’s all-time low sits at 45.

4 and its high at 76. 2. Transportation capacity was among the sharpest movers in the report, sliding from 30. 8 in June to 28. 4 in July — a decline of roughly 2. 5 points — with the directional indicator showing contraction at a faster rate of change. Transportation utilization fell even more steeply, dropping 9. 7 points from 74. 7 to 65.

0, though the projected direction remained expansionary. Transportation pricing also eased, falling from 92. 4 to 86. 9, consistent with softening in the national spot rate index. On the spot rate side, FreightWaves’ NTI USA index declined to $3. 47, off about 7. 5% month over month, while the STRI. US tender rejection index dipped to 13. 84%, down 2.

74% from the prior month. Truckload contract rates, tracked by VCRPM1. USA, held at $271 plus fuel and remained 18% above year-ago levels — a dynamic the analyst said is pulling more freight back into routing guides and compressing rejection rates.

“As contract rates rise, mini bids and new bid cycles are executed, routing guides are standing up, more contract freight is being accepted at those newly agreed-upon increased contract rates, which then causes those tender rejections to normalize a bit and fall.” Inventory levels slipped from 60. 5 in June to 55.

0 in July, a drop of more than 5 points, though the LMI’s projected direction for inventories pointed to future expansion at a faster rate of change. Warehousing capacity also edged lower, from 47. 5 to 46. 3, while warehousing pricing continued to climb, rising from 73. 8 to 75. 5. Aggregate logistics costs dipped slightly from 242. 1 to 239.

5 but were projected to expand, albeit at a slower pace. Adding pressure to available capacity, the Department of Transportation’s Operation Highway Shield — a coordinated enforcement effort involving DHS, FMCSA, and state agencies — conducted a three-day blitz through the Midwest in late July.

The operation pulled more than 750 unsafe trucks or drivers from the road, detained 51 people on immigration violations, and cited 36 English-language proficiency violations. The analyst noted the multi-agency crackdown represents an ongoing regulatory push that creates additional barriers to entry and could further support spot rates.

Looking ahead, the FreightWaves analyst said capacity is unlikely to re-enter the market at scale and forecast continued tightening through the last week of August, citing Road Check and other safety enforcement activity. A more detailed breakdown of the July LMI will be presented Thursday on the Freightonomics segment, featuring LMI co-author Dr.

Zach Rogers alongside Zach Strickland. July LMI fell to 68. 9% from 71. 7% in June but remains well above the all-time average of 61. 7%, signaling continued freight market expansion. Transportation capacity dropped 2. 5 points to 28. 4 and is contracting at a faster rate, while truckload contract rates hold 18% above year-ago levels.

Operation Highway Shield pulled more than 750 unsafe trucks or drivers from the road in a late-July Midwest blitz, adding to capacity constraints. Speaker 1 [0:08] So, for today’s Sonar update, August 5th, Wednesday, I want to talk a little bit about the overall market and then about the new LMI report that just came out.

So, overall market truckload rejections, our STRI. US index, has fallen