Wed, 26 Jan 2022

LOS ANGELES, Dec. 6 (Xinhua) -- The Logistics Managers' Index for November came in at 73.4, up by 0.8 from October's index score, showing the extended run of logistics expansion throughout the year.

The monthly index, designed to measure key supply chain data from 100 upper-level industry managers in the country, was released in a report by Colorado State University on Monday.

The overall growth of the index has been over 70.0 for the tenth consecutive months, a level researchers say is a significant expansion, signaling more pressure for the supply chain in the country.

Analyzing month-to-month changes in warehousing, transportation and inventory, the latest figures were driven by many factors, especially warehousing prices, according to the report.

The subindex of the warehouse price rose up to over 90.0 for the first time in history, the report said, calling the increase a "representative of costs as a whole."

These high prices in November were caused by the rapid movement of a significant volume of inventory from upstream storage, including docks, wholesales and distributors to downstream retailers, the report explained.

"In October, upstream respondents reported rates of growth 10.3 points higher than their downstream respondents. In November this flipped, and upstream respondents reported inventory growth was 10.9 points lower than downstream respondents," the report said.

Expecting a less than previously predicted severe shortage of retail goods this holiday, the report said the improvement "seems to have been largely achieved by firms spending heavily on warehousing and transportation to get goods downstream."

According to the report, some retail giants have chartered their own ships to ensure the availability of their inventory. "For example, Walmart's third quarter inventory levels were up 11.5 percent from the same time last year," it noted.

However, "smaller firms such as The Gap, Victoria's Secret, and Abercrombie & Fitch who did not have the resources to chart their own ships may still be short on inventory, lacking the supply to keep up with consumer demand," the report said.

Furthermore, the report noted that U.S. retailers intentionally reduced product promotions amid the lack of logistics capacity.

E-commerce retailers registered 10.7 billion U.S. dollars in sales on Cyber Monday, down 1.4 percent from 2020, while online sales on Black Friday were down from 9 billion dollars last year to 8.9 billion dollars, marking the first decrease ever in year-over-year online sales for the holiday, the report said.

The Logistics Managers' Index, founded in 2016, is a joint project by Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University and the University of Nevada, Reno, along with the Council of Supply Chain Management Professionals.

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