December 2025 Logistics Manager’s Index: Inventory Drawdown Signals Shifting Dynamics into 2026

Kelsea Ansfield
2 days ago
2 min read

The latest Logistics Manager’s Index (LMI) for December 2025 registered at 54.2, down 1.5 points from November's 55.7. While still indicating overall expansion (above 50), this marks the slowest growth since April 2024 and continues a trend of readings below the historical average.

The report highlights a dramatic downstream push of inventories driven by robust holiday consumer spending, relieving backlog pressures but tightening transportation markets.

Key Highlights from the December LMI

Overall LMI: 54.2 (down 1.5) – Expansion slowing, with early-December contraction giving way to later-month improvement.
Inventory Levels: Plunged to an all-time low of 35.1 (down 17.4) – Historic contraction as firms cleared excess stock.
Inventory Costs: Still expanding at 62.9 (down 8.1) – Costs remain elevated despite volume drops, influenced by tariffs and last-mile delivery.
Warehousing Utilization: Hit a second consecutive all-time low at 42.9 (down 4.7).
Warehousing Capacity: Expanded to 61.2 (up 6.4).
Warehousing Prices: Continued rising at 66.2 (up 3.3).
Transportation Capacity: Contracted sharply to 36.9 (down 13.1) – First contraction since early 2022.
Transportation Utilization: 58.2 (up 6.7).
Transportation Prices: Rose to 66.7 (up 1.8) – Highest since January 2025, signaling the strongest freight market in over three years.

These shifts reflect strong Q4 consumer demand—holiday spending up 3.9%-4.2% per Mastercard and Visa—despite mixed sentiment and reliance on debt financing.

What This Means for Supply Chains in 2026

The aggressive inventory destocking provided relief from 2025 backlogs but has tightened transportation capacity, driving prices higher even as diesel costs stabilized. Upstream firms report more activity than downstream, with retailers favoring lean inventories to manage cash flow amid ongoing tariff impacts.

Looking ahead, respondents predict:

Overall LMI expansion at 65.3.
Lean Inventory Levels (59.0) but high Costs (72.1).
Continued Warehousing Price growth (74.7).
Significant tightening in Transportation – Capacity at 40.5, Utilization 70.3, Prices 76.8.

This points to a potential freight market upswing if consumer demand holds, but with risks from debt hangover, policy uncertainty, and global trade shifts.

Positioning Your Operations for the Year Ahead

At Gain Consulting, we help clients capitalize on these transitions through:

Inventory optimization to balance leanness with resilience.
Carrier negotiations amid rising transportation rates.
Warehousing strategy reviews to navigate utilization softness and price pressures.
Tariff and compliance planning for sustained cost control.

Our proven approaches guarantee improvements in effort, time, and cost—ensuring you #GainAnAdvantage in a dynamic 2026.

Source: Logistics Manager’s Index Report, December 2025 (Arizona State University, Colorado State University, et al., in conjunction with CSCMP).