While tariffs have largely stayed below the fold compared to other news items this year, they continue to impact freight. And the effects are showing in the July Logistics Managers' Index (LMI), which dipped 2.2 points from June to a still healthy reading of 68.9. The primary culprit for the drop is Inventory Levels, down 5.5 for the month to 55.
Authors suggest that slower growth relates primarily to retailers who'd pulled merchandise forward last month to beat a new round of tariffs taking effect. They note particularly downstream inventories went from a healthily expanding 66 to a contracting 46.3 month to month.
Even with the slower expansion, Inventory Costs remain high, rising 1.1 to 77. Warehousing Prices aren't far behind - with a reading of 75.5, the metric is at its highest level since January of last year. Warehousing Utilization, though, dipped 3.3 to 66.1.
In addition to the elevated warehousing and inventory cost metrics, transportation continues to drive much of the LMI's expansion. Transportation Prices - even with a 5.5 point monthly drop - are at 86.9, while the Transportation Capacity crunch continues to get crunchier, losing another 2.4 points to 28.4 (the second lowest reading of any metric in the index's nearly 10 year history).
Interestingly, Transportation Utilization was the biggest mover of all the index metrics, falling 9.7 to 65.
Future predictions were basically flat vs June, with respondents expecting a reading of 70.5 (-0.1 from last month) a year from now. That suggests optimism among logistics pros that the market will remain in good shape in the coming months, with authors summarizing their overall view that inventories will increase as capacity remains tight - leading to continued higher costs throughout the supply chain.
Warning signs do abound going forward, including not only tariffs, but a still depressed housing market, elevated diesel costs and precarious consumer confidence (though sentiment was up significantly in July).
See the summary of the July 2026 Logistics Managers' Index, by the numbers:
Researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno - in conjunction with the Council of Supply Chain Management Professionals (CSCMP) - issue the report. The LMI score is a combination of eight unique components that make up the logistics industry, including: inventory levels and costs, warehousing capacity, utilization, and prices, and transportation capacity, utilization, and prices.
The LMI is calculated using a diffusion index, in which any reading above 50.0 indicates that logistics is expanding; a reading below 50.0 is indicative of a shrinking logistics industry. The latest results of the LMI summarize the responses of supply chain professionals collected in July 2026. Learn more about the index on our podcast with its primary author Zac Rogers, Ph.D., associate professor of Supply Chain Management at Colorado State University.
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