Transportation Prices Shoot Up As Capacity Keeps Growing

Transportation Prices Shoot Up As Capacity Keeps Growing
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The prices have been moving from a sunken place for the second instance in so long in the month of February, all according to the supply chain found on Tuesday. And yet the rate of growth in transportation capacity way higher with the indication of a recovery in freight cycle.

Of course the subindex for transportation prices would show an increase by rates of 1.8 percentage points all sequentially in February, all in accordance to the data that had been collected in the Logistics Managers’ Index. Before January, the index was already in itself within contraction territory since July 2022.

Of course, the LMI happens to be a diffusion index, where it shows a reading above fifty, which can prove for expansion as one that tracks below fifty is indicative of contraction.

When noticing the upstream firms of (60.9) you can tell that they have been able to return a stronger price indication as wholesalers and manufacturers in stark contrast to downstream firms (52.7) being retailers. Overall transportation pricing subindex would be slowed while February would continue. It would register a 62 within the beginning two weeks of the month in comparison to 52.4 within the back half of the month.

The LMI data itself could include transportation rates in regards to other modes, such as ocean shipping, during such an instance, the rates would spike all from the Red Sea conflict, as drought conditions at the Panama Canal could lead to a run-up in the Lunar New Year.

Transportation capacity at about 60.9 would expand upwards by about 6.4 points while utilization would step up to 56.5 by at least 1.5 points.

A year from now, it’s likely that the outlook for transportation equipment utilization would go a year from now by about 6.4 points higher.

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