Key Highlights

  • The LMI read at 69.5 in May 2026, down marginally from April's 69.9 but still the second-fastest pace of expansion since March 2022.
  • Transportation Prices reached an all-time index record of 96.0, the highest reading for any metric in the LMI's ten-year history.
  • Inventory Costs surged to 84.1, producing a historic 29.2-point gap above Inventory Levels, the widest divergence ever recorded.
  • Aggregate logistics costs rose to 250.9, the highest since March 2022, the period that preceded the steepest US Inflation in four decades.
  • Small firms bore the sharpest burden, with Transportation Prices at 98.2, near the index maximum of 100.

Released on June 2, 2026, the May Logistics Managers' Index (LMI) reads at 69.5, a marginal decline from April's 69.9 but still the second-fastest pace of expansion in over four years. The headline number conceals a more consequential story: logistics costs are rising at a pace last seen when the US was navigating its highest inflation in four decades, and this time the driver is Supply, not Demand.

Inventories: Volumes Slow, Costs Accelerate

Inventory Levels eased to 54.8 from 56.3 in April, with late-May activity slipping to near stasis at 50.9, a sharp Reversal from the robust 60.5 logged earlier in the month. Smaller firms drove the cooling, reporting growth of just 51.0 against 59.5 for larger counterparts.

The more pressing concern is Inventory Costs, which surged 9.4 points to 84.1, the highest since May 2022. The resulting gap of 29.2 points between the cost and Volume indices is the widest in the history of the index. Per-unit carrying costs are escalating independently of stock accumulation, consistent with Tariff pass-through and fuel inflation rather than volume pressures. Upstream firms face the sharper squeeze, with a cost-to-levels gap of 31.2 points against 23.4 for Downstream respondents.

Warehousing: Capacity Recovers, but Unevenly

Warehousing Capacity returned to mild expansion at 50.5, up five points from April's contraction. The recovery was driven by downstream retailers running lean, with capacity at 60.9 against upstream contraction of 44.3, now four months running. Small firms reported contraction at 44.1 against 58.1 for large firms, reflecting the scale advantage larger operators hold in securing space under elevated demand. Warehousing Prices, while easing slightly to 70.7 from 72.7, remain at a level the index classifies as significant expansion.

Transportation: A Market Writing History

Transportation is where the May data becomes historically significant. Prices rose a further point to 96.0, the highest single-metric reading recorded in the LMI's ten-year history. The Strait of Hormuz closure has sharply tightened global fuel availability, and the consequences are feeding directly into freight costs across all modes. Small firms reported 98.2, statistically above the 93.3 recorded by large firms, confirming that smaller operators are bearing a disproportionate share of the escalation.

Transportation Capacity extended its contraction into a sixth consecutive month at 31.7. Upstream capacity contracted sharply at 25.7, consistent with the inventory pull-forward underway among manufacturers seeking to lock in stock ahead of further price increases or product shortages. Transportation Utilization held near its two-year high at 69.5.

Outlook: The Fed Has a Problem It Cannot Rate-Hike Away

Aggregate logistics costs at 250.9 are the highest since March 2022, which preceded the steepest US inflation in 40 years. US PCE is running at 3.8% year-over-year, with energy spending up 27.1%. University of Michigan consumer sentiment fell to an all-time low of 44.8 in May, with 57% of respondents citing high prices as a direct financial burden. Federal Reserve policymakers have signalled readiness to raise rates if disinflation fails to materialise; the Survey of Professional Forecasters projects CPI at 6% for the second quarter.

The structural problem is that higher interest rates cannot open a closed waterway, produce more fuel, or resolve a geopolitical disruption. Supply-driven inflation operates outside the conventional monetary transmission mechanism. Forward LMI predictions project aggregate logistics costs at 253.6 over the next 12 months, Transportation Prices at 91.4, and Warehousing Prices at 81.2. Respondents are not anticipating relief. They are pricing in more of the same.