LMI: Capacity at 40, Prices at 90 in August
The latest Logistics Managers' Index reveals a tight freight market where transportation capacity remains deeply contracted at a reading of 40, yet prices have surged.
Transportation prices jumped 3.1 points in the latest month to a reading of 90 on the Logistics Managers’ Index (LMI). This surge comes even as the capacity contraction showed early signs of moderating, creating a stark market disconnect.
According to a Wednesday Sonar Update, this paradox reflects carriers' urgent need to restore profitability after years of depressed rates. The overall LMI registered 66.6 for the period, down 2.2 points from July, with slower inventory growth being the primary drag.
Capacity Contraction Moderates
Transportation capacity registered a reading of 40 in the most recent report. Any figure below 50 indicates contraction. This reading, while still signaling a deep squeeze, represents an 11-point improvement from July. It is the slowest rate of capacity contraction recorded in six months.
Concurrently, transportation utilization surged 5.6 points to 70.6. The report categorizes anything above 70 as robust growth. This is only the second time in five years the index has hit that level.
Manufacturing and Pricing Context
On the manufacturing side, the ISM Manufacturing PMI returned a 54.6 reading. This was one point below July’s level, which had been the highest since May 2022, but above the economist consensus of 55.2. The New Orders Index held in expansion territory for the eighth consecutive month at 53.7, while manufacturing employment remained positive for the second straight month after turning positive for the first time in 33 months in July.
Overall manufacturing respondent sentiment was 42% positive and 58% negative. Pricing volatility was cited as the top concern among negative comments.
Analyst Julie Van de Kamp explained the carrier perspective. She said carriers are emerging from a multi-year, very challenging environment where profitability was nearly impossible. She added that carriers must get rates back up to a profitable level to continue investing in drivers, safety, and maintenance.
Year-Over-Year Market Shift
Year-over-year comparisons highlight the dramatic shift in market conditions. The current capacity reading of 40 is far below levels seen in previous years. Meanwhile, transportation prices at 90 stand far above prior readings for the same month.
The following table compares key LMI readings for August across recent years:
| Metric | August 2025 | August 2024 | August 2023 |
|---|---|---|---|
| Transportation Prices | 90 | 61 | 42 |
| Transportation Capacity | 40 | ~55 | 60 |
| Overall LMI | 66.6 | 56 | 51 |
Van de Kamp described the price increase as an incredible increase in pricing year over year. The overall LMI of 66.6 also runs approximately 10 points higher than the prior three years for this month.
Outlook and Metrics to Watch
Van de Kamp said the pricing pressure is expected to persist. LMI survey respondents anticipate the transportation market will remain very tight over the next 12 months. She noted that while some cooling has appeared in July and the latest data compared to earlier 2025 peaks, capacity is still absolutely in that contraction range and incredibly tight.
Looking ahead, Van de Kamp highlighted three Sonar metrics to watch for signals. The Sonar Tender Rejection Index (STRI) will indicate capacity, particularly in the Midwest and along the coasts as import-driven demand builds into the fourth quarter. The Sonar Truckload Volume Index (STVI) will track regional volume shifts heading into peak season. The National Truckload Index (NTI) will monitor spot rate movement.
The latest data highlights a market where high demand and constrained supply continue to push costs higher for shippers.
