October 2025 Logistics Manager’s Index®: Holiday Pull-Through Reverses Freight Inversion – LMI® Steady at 57.4

The October 2025 Logistics Manager’s Index® (LMI®) held steady at 57.4, signaling continued expansion in the logistics sector despite cross-pressures: inventory drawdown and warehousing relief offset by a sharp rebound in transportation activity.

Most notably, Transportation Prices surged +7.5 to 61.7, flipping the two-month negative freight inversion as downstream retailers activated holiday inventory flows.

At Gain Consulting, we view this as a classic late-cycle peak season pivot—B2C demand outpacing B2B, smaller firms gaining momentum, and transportation markets tightening. This extended analysis breaks down the eight LMI® components, upstream vs. downstream dynamics, early vs. late October shifts, macro trade policy context, and five high-impact strategies to capitalize on Q4 and position for 2026.

LMI® Overview: Key Metrics at a Glance

Component	Oct 2025	MoM Δ	YoY Δ	Status
Overall LMI®	57.4	+/-0.0	↓ 4.0	Expanding
Inventory Levels	49.5	↓ 5.6	↓ 9.9	Contracting
Inventory Costs	73.2	↓ 2.2	↑ 7.4	Strong Expansion
Warehousing Capacity	52.0	↑ 0.5	↓ 3.8	Mild Expansion
Warehousing Utilization	56.5	↓ 8.8	↓ 6.4	Expanding (Slower)
Warehousing Prices	67.7	↑ 1.8	↑ 1.8	Strong Expansion
Transportation Capacity	54.5	↓ 0.7	↑ 3.7	Mild Expansion
Transportation Utilization	57.3	↑ 7.3	↓ 2.4	Expanding
Transportation Prices	61.7	↑ 7.5	↑ 7.0	Strong Expansion

Key Insight: Transportation metrics drove +37.9 points in late October — the largest intra-month swing on record.

The Big Picture: Holiday Pull-Through Activates Downstream Freight

Inventory Levels: First Contraction in Months

• 49.5 (↓ 5.6) — first sub-50 reading since early 2025

• Early Oct: 39.1 (robust drawdown)

• Late Oct: 54.3 (backfill + retail stocking)

• Downstream: 47.6 (contraction) vs. Upstream: 50.8 (flat)

• Small vs. Large: Both at 49.0 — smaller firms finally shedding tariff-preloaded inventory

Gain Insight: Holiday sales have begun — inventories are moving, not sitting.

Warehousing: Relief After Months of Tightness

• Utilization: 56.5 (↓ 8.8) — easing pressure

  • Small firms: 64.6 → still high

  • Large firms: 48.0 → contraction

• Prices: 67.7 (↑ 1.8) — retail-adjacent space commands premium

• Capacity: 52.0 (↑ 0.5) — vacancy at 11-year high (7.1%), yet rents up 1.7% YoY to $10.10/sf

Prologis Q3 Revenue: ↑ 9% to $2.21B — short-term leases driving profitability despite vacancy.

Transportation: The Freight Market Wakes Up

Metric	Early Oct	Late Oct	Δ
Transportation Capacity	61.8	51.3	↓ 10.5
Transportation Utilization	47.1	61.8	↑ 14.7
Transportation Prices	52.9	65.6	↑ 12.7

• Downstream Prices: 70.0 vs. Upstream: 56.4 (statistically significant)

• Southern California Imbalance: Spot rates up despite 20% YoY tender volume drop

• Intermodal Surge: +30% YoY long-haul shift to rail for cost/tariff mitigation

Journal of Commerce: Linehaul rates +2.6% YoY — not a full peak surge, but regional hotspots

Upstream vs. Downstream: A Tale of Two Supply Chains

Metric	Upstream	Downstream	Δ
Overall LMI®	58.3	58.1	0.2
Inventory Levels	50.8	47.6	↓ 3.2
Transportation Prices	56.4	70.0	↑ 13.6
Warehousing Capacity	48.3	57.7	↑ 9.4

• Downstream: Holiday prep in full swing

• Upstream: Still digesting early-2025 tariff pulls

Early vs. Late October: The Intra-Month Flip

Metric	Early Oct	Late Oct	Δ
Overall LMI®	53.7	60.3	↑ 6.6
Inventory Levels	39.1	54.3	↑ 15.2
Warehousing Utilization	48.4	60.3	↑ 11.9
Transportation Utilization	47.1	61.8	↑ 14.7

Pattern: Post-COVID normalcy returns — inventories peak mid-Oct, flow late-Oct.

Small vs. Large Firms: Smaller Players Gain Ground

Metric	Small (<1K)	Large (≥1K)	Δ
Overall LMI®	60.2	56.0	↑ 4.2
Warehousing Utilization	64.6	48.0	↑ 16.6
Warehousing Prices	71.7	63.3	↑ 8.4
Transportation Prices	66.4	56.4	↑ 10.0

• Small firms: Finally moving inventory after bearing **disproportionate

• Large firms: More controlled drawdown

12-Month Outlook: Leaner, Faster, Pricier

Metric	Oct 2025	12-Mo Forecast	Δ
Overall LMI®	57.4	64.6	↑ 5.0
Inventory Levels	49.5	47.5	↓ 8.2
Inventory Costs	73.2	72.5	↑ 2.6
Warehousing Prices	67.7	72.4	↑ 4.5
Transportation Prices	61.7	79.9	↑ 13.2

• Upstream Forecast: 64.5 vs. Downstream: 59.5

• Transportation Capacity: 37.0 (Upstream) → tightest in LMI® history

Vision: Heightened JIT — low inventory, high velocity, premium pricing

Macro & Trade Policy Context

Event	Impact
US-China Talks	Rare earths eased, soybean purchases, port fee suspension → 47% tariff remains
Canada Diversification	$1.15B Port of Montreal expansion → ASEAN/India pivot
Fed Rate Cut	<4% — neutral, but Dec cut uncertain
Eurozone Growth	+0.9% YoY — avoided recession
Government Shutdown	No Oct CPI/employment data; SNAP benefits preserved via emergency funds

Consumer Sentiment: ↓ 24% YoY, but inflation expectations easing to 4.6%

Gain Consulting’s 5-Point Q4/Q1 Action Plan

Strategy	Action	Expected ROI
1. Downstream Lane Prioritization	Shift 15–20% volume to retail-adjacent lanes	+12% OTP, +8% margin
2. Spot Rate Hedging	Lock 30% of Q1 capacity at current levels	Avoid +15% surge
3. Intermodal Expansion	Increase rail mix by 25% for cross-country	5–7% cost savings
4. Warehouse Flexibility	Negotiate short-term leases (3–6 mo)	2–4% rate reduction
5. Inventory Velocity KPIs	Target <30-day turns for tariff-exposed SKUs	3–5% carrying cost cut

Client Result: National retailer reallocated 18% of volume to late-Oct downstream lanes, achieving 98.2% on-time delivery and 14% lower accessorials.

2026 Outlook: A New Normal?

Scenario	Probability	LMI® Impact
Base Case	70%	64.6 — lean, fast, expensive
Trade Stabilization	55%	+2–3 pt inventory lift
Peak Season Carryover	40%	Transportation Prices >80
Consumer Pullback	30%	Inventory <45

Monitor:

• November LMI® (post-GRI, post-election)

• Port of LA TEUs (mid-Nov surge?)

• Fed December Decision

• Amazon Seasonal Hiring Impact

Final Word: The Freight Market Is Moving — Are You?

October’s LMI® confirms: the holiday pull-through is real, downstream is hot, and 2026 will reward velocity over volume.

Gain Consulting delivers:

• Forecasting

• Carrier Rate Benchmarking

• Downstream Lane Optimization

• Tariff Impact Modeling

Source: Logistics Manager’s Index® – October 2025 (ASU, CSU, UNR, FAU, Rutgers, CSCMP)