Key Highlights

  • The Logistics Managers' index rose to 70.7 in October from 70.2, its second highest reading in four years.
  • Inventory Levels jumped 8.0 points to 66.9 as retailers stocked up for holiday sales, the fastest expansion since September 2022.
  • Inventory Costs rose to 88.8 and Aggregate Logistics Costs to 257.5, both the highest since March 2022.
  • Warehousing Capacity at 43.5 and Transportation Capacity at 38.0 stayed in contraction, tightening storage and trucking space.

Logistics Growth Stays Near a Four Year High

The Logistics Managers' Index (LMI) rose to 70.7 in October 2026 from 70.2 in September, according to the report released on Tuesday, November 3, 2026. The reading is the second highest in four years, behind only June's 71.1, and is up 13.3 points from a year earlier.

The LMI is a diffusion index, so any reading above 50 indicates that logistics is expanding. The index has now exceeded 70 in three of the last five months, having not cleared that level for more than four years before this run. Readings in 2026 have averaged 67.4, up from 58.7 in 2025 and the second highest calendar year average in the index's 10 year history, behind only 2021.

Holiday Stocking Lifts Inventories

Inventory Levels drove the gain, rising 8.0 points to 66.9 from 58.9, the fastest expansion since September 2022. Retailers built up stock slightly faster than Upstream firms, at 69.6 versus 64.1, which the report's authors read as retailers stocking up for holiday sales. In September, Downstream firms had reported a reading of 53.8.

Stocking accelerated through the month. Inventory Levels expanded at 61.8 in early October and at 72.1 in late October. After a year of caution over weak consumers and the high cost of tariffs and transportation, firms are pulling inventories in as quickly as they can, often at high cost, to Capitalize on what they hope will be a strong holiday season.

Costs Climb to the Highest Since March 2022

Inventory Costs rose 8.9 points to 88.8 from 79.9, the highest since March 2022. Warehousing Prices rose 7.2 points to 80.7, their fastest expansion since May 2022 and the first reading in the 80s in more than two years. Transportation Prices slowed to 88.0 from 92.7 but are still expanding at a highly significant rate.

Together, the three cost and price metrics produced an Aggregate Logistics Costs reading of 257.5 on a scale of 0 to 300. That is up 11.4 points from September's 246.1 and 54.9 points above October 2025's 202.6, and it is the fastest rate of expansion since March 2022. The researchers behind the index said the reading may foreshadow continued Supply driven inflation.

Fuel is a major factor. US diesel averaged USD 6.352 per gallon in the last week of October, up USD 2.634, or 71%, from a year earlier. Average diesel prices had never exceeded USD 6.00 until September 14 and have stayed above that level for six consecutive weeks.

Storage and Trucking Space Stay Tight

Rising inventories are pressing on available space. Warehousing Capacity read 43.5, up 4.2 points but still contracting, and it has contracted in six of the nine months of 2026. Upstream firms reported contraction at 37.5, while downstream firms reported no movement at 50.0. Smaller firms reported 40.0 and larger firms 48.3.

Warehousing Utilization eased 5.5 points to 58.8 while continuing to expand. Data Center construction is adding Demand for affiliated warehousing and outdoor storage, particularly in the South and along the East Coast, and has pushed up rents in some markets.

Transportation Capacity rose 3.6 points to 38.0 but continues to contract. Transportation Utilization fell 2.6 points to 63.5, with upstream firms at 69.3 and downstream firms at 53.6. In the trucking market, new truckload contracts are up 13.11% from the contracts they replace, according to freight market data, and tender rejection rates are holding at 13.9%. Intermodal volumes are rising, with containers and trailers moved by rail up 12.6% in the week of October 12 and up 11.8% two weeks later.

Demand Signals Ahead of the Holidays

Several indicators point to strong holiday activity. Online retailers generated USD 9.86 billion in spending during Amazon (NASDAQ:AMZN) Prime Big Deal Days in early October, up 8.5% from a year earlier. The Port of Los Angeles projects Import volumes up 33% to 54% from a year earlier through the last week of October and the first two weeks of November.

Seasonal hiring is under way. United Parcel Service (NYSE:UPS) plans to hire 100,000 seasonal employees, Amazon 300,000 and the US Postal Service another 10,000, though several logistics providers are pushing hiring back until mid November to limit labor costs. For hire trucking employment rose to 1.45 million in September, its first increase in 41 months.

Economic Backdrop

US GDP grew at a 3.4% annualized rate in the third quarter, with private inventories contributing 1.61 percentage points to growth after subtracting 0.53 points in the second quarter. Initial jobless claims fell to 194,000 in the last week of October, the lowest since mid July. The Federal Reserve held interest rates steady at its October meeting with two dissenting votes, even as the PCE price index rose 0.5% on the month and 3.6% from a year earlier.

Year Ahead Expectations

Respondents expect the overall index to read 69.1 in 12 months, up from September's forecast of 68.6. Upstream firms expect faster expansion, at 74.3, than downstream firms at 64.1. Inventory Levels are forecast at 62.5, Inventory Costs at 81.3, and Transportation Prices at 90.0. Respondents also expect some relief on space, with Warehousing Capacity at 52.9 and Transportation Capacity at 49.3.

What to Watch Next

Items on the calendar include the November Logistics Managers' Index, the path of Inventory Costs after reaching 88.8, diesel prices relative to USD 6.00, the Warehousing and Transportation Capacity readings, truckload contract rates, port import volumes, and the pace of seasonal hiring.