Businesses in the US have allowed inventory levels to fall at the fastest pace in a decade after a year of high imports due to tariffs. The Logistics Managers’ Index (LMI) shows inventory levels at 35.1 and warehouse utilization at 42.9, signaling a shift towards just-in-time inventory models. Trade policy uncertainty remains high.

Thinner inventories may increase urgency around shipping, as transportation providers face challenges with lean operations. The SONAR Tender Rejection Index (STRI) jumped to over 13%, the highest since April 2022. Carriers struggle to normalize after holiday disruptions, indicating less buffer in their networks. Capacity remains tight despite the typical post-holiday ease.

The FreightWaves Chart of the Week shows the state of the freight markets using data from SONAR. Inventory levels are at an all-time low, leading to a potential increase in shipping urgency. Shippers anticipate challenges in securing transportation capacity due to economic uncertainty and cost pressures. Demand growth may not be necessary for the market to turn.

Read more at Yahoo Finance: Warehouses empty in December