Despite some recent positive macroeconomic signs, the logistics economy remains on a path of below-average growth, driven by uncertainty stemming from tariffs and a stagnant transportation sector, according to recent reports.
Data from the September Logistics Managers’ Index Report (LMI) and the Q4 TD Cowen/AFS Freight Index point to ongoing softness in logistics and freight markets as peak shipping season gets underway.
Growth in the logistics economy slowed in September to its lowest level since March, falling to 57.4 on the LMI scale. This was down nearly two points from August and marked the seventh straight reading below the LMI’s historical average of 61.5. An LMI score above 50 indicates expansion; a score below 50 indicates contraction.
The slowdown was driven by transportation metrics, which saw little to no growth during the month. Transportation prices saw their slowest growth rate since April 2024, expanding to 54.2. Transportation utilization dropped nearly five points to 50—which essentially means no growth—and transportation capacity fell more than two points to 55.1.
“The apparent stagnation in the transportation sector is likely a result of the previous pull forward and preemptive push of ordering from firms responding to the tariffs earlier in the year,” LMI researcher Steven Carnovale, associate professor of supply chain management at Florida Atlantic University’s (FAU) College of Business, said in a statement about the report. “As a result, we see a utilization decrease in this metric, which can be a harbinger of an overall freight slowdown in general.”
September’s transportation data continued a slight negative freight inversion—which occurs when transportation capacity grows faster than pricing—that began in August. Whether or not those conditions will continue—potentially leading to a freight recession—will depend largely upon peak season shipping activity among downstream firms, Carnovale said. Strong retail orders will heighten demand for logistics services.
“The key to watch will be orders for the holiday season,” Carnovale said.
The Q4 TD Cowen/AFS Freight Index—which gives predictive pricing for truckload, less-than-truckload, and parcel transportation markets—revealed similar results. The latest data shows that truckload carriers, in particular, are battling continued excess capacity and depressed rates.
“… the truckload market continues to face headwinds from sluggish demand and shifting trade policies, which do not indicate relief from the excess capacity that has suppressed rates for nearly three years,” the researchers wrote in their October 14 report. “In Q4 2025, the truckload rate per mile index is projected to reach 6.1% above the January 2018 baseline—a modest 0.1% [quarter-over-quarter] increase and 0.9% [year-over-year] increase, but the 11th straight quarter with rates at or below 6.2%.”
The quarterly freight index is produced by TD Cowen Research and third-party logistics service provider AFS Logistics.
The LMI report is based on a monthly survey of logistics managers across the country that is analyzed by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, and produced in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
