— ITS Logistics confirms transportation sector remains in expansion territory but could be headed for a possible capacity crunch —
ITS Logistics June Supply Chain Report
RENO, Nev., July 01, 2025 (GLOBE NEWSWIRE) — ITS Logistics released the June ITS Supply Chain Report. The report highlights the cost-driven factors behind the Logistics Managers’ Index (LMI), showcasing signs of expansion. It also highlights the current container volumes at several ports, which are experiencing the steepest decline since the COVID era, while transportation capacity remains in expansion territory. However, this does not alleviate concerns about a potential tightening in the transportation sector. Lastly, tensions with Iran could drive up oil prices, producing further strain on the trucking market as well as on consumers.
“The Logistics Managers’ Index saw its second consecutive month of growth, driven primarily by escalating costs,” said Josh Allen, Chief Commercial Officer at ITS Logistics. “Tangentially, the Transportation Capacity Index decreased, falling below 2023 and 2024 levels for what should be a period of increasing demand for trucking. Similarly, van and reefer rates remain flat as we move into the height of retail season.”
According to the most recent LMI report, the index rose to 59.4, indicating expansion for the second consecutive month; however, this growth is being driven by surging inventory costs, currently at 78.4, rather than actual movement. This is the highest they’ve been since October 2022, during a period when firms were facing challenges due to the end of the inventory buildup that resulted from the COVID-19 pandemic. As inventory becomes more expensive to hold and less mobile, it is leading to potential concerns related to overstocked warehouses and declining throughput. In all, the tension involving rising costs and stagnant flows further highlights inefficiencies in the supply chain velocity.
In addition to the experienced LMI expansion, container volumes at the top 10 U.S. ports decreased by 10.7% in May, with West Coast ports being the most impacted. The Long Beach (LB) port witnessed a 22.4% decrease, followed by the Port of Los Angeles with an 18.4% decline. The Port of Tacoma experienced a 25.6% decline, and collectively, the ports lost more than 170,000 TEUs. This marked the worst month-over-month volume drop since 2020, reflecting a sharp correction in import demand following the April frontloading, as well as the impact of new tariffs and the expiration of the de minimis exemption.
“Overall, U.S. import volumes declined 9.7% month-over-month (MoM),” continued Allen. “The observed drop-off due to import slowdown was a direct result of the impact of the 145% U.S. tariff on Chinese imports. As it pertains to transportation capacity, the current LMI metrics strongly suggest that while transportation capacity is still in expansion territory, the downward trend and disparities between upstream and downstream capacities are resulting in industry professionals questioning whether it is a sign for the potential reality of a tightening for the transportation sector.”
