Transportation prices finally outran capacity growth in October, a notable shift that hints at firmer conditions for carriers heading into the holidays. The latest Logistics Managers’ Index (LMI) shows the pricing subindex rising sharply while the capacity subindex decelerated, breaking a two‑month stretch in which extra trucks were coming online faster than rates could keep up. For fleets, that combination typically brings modest leverage back to the spot market—especially on retail‑oriented lanes—even if the broader market remains far from a full-blown crunch.
By the numbers, October’s overall LMI held at 57.4, matching September’s pace of expansion. Under the hood, however, the mix changed: transportation prices jumped 7.5 points to 61.7 and utilization climbed to 57.3, while available transportation capacity slipped to 54.5. The survey also showed a clear split between channels—downstream respondents closer to the end consumer reported much stronger pricing pressure than upstream manufacturers and wholesalers—consistent with holiday stock pull‑through and a retail‑led pulse in freight demand.
Momentum strengthened as the month progressed. Responses captured in the back half of October showed capacity growth nearly stalling while utilization and pricing accelerated—a pattern that often precedes tighter conditions on high‑velocity lanes serving major metros and parcel hubs. For dispatchers, that suggests keeping extra tractors and team drivers pointed toward markets with elevated e‑commerce flows, and scrutinizing dwell times where fulfillment centers are running hot.
One important counterweight: fuel. The U.S. average on‑highway diesel price rose to $3.753 per gallon for the week of November 4, up 3.5 cents from the prior week and about 22 cents higher than a year ago. Higher pump prices can consume the benefit of firmer linehaul in short order, so carriers should recheck surcharge schedules against the LMI’s reported pricing lift to make sure margins don’t get squeezed on longer headhaul runs.
At the same time, the industrial economy remains a drag. ISM’s October Manufacturing PMI fell to 48.7, signaling another month of contraction as new orders and production softened. That backdrop helps explain why the LMI narrative is bifurcated: upstream, B2B freight tied to factories is still sluggish; downstream, B2C flows are driving the price firmness the LMI picked up. Carriers with a heavier mix of automotive, machinery, or metals may see less of the October pricing tailwind than those tied to retail and grocery.
What it means for trucking strategy right now:
– Pricing power is selective, not universal. Expect firmer bids and fewer givebacks on lanes feeding major retail nodes, while industrial corridors remain competitive. Align sales efforts and truck positioning accordingly.
– Watch the late‑Q4 handoff. The LMI’s late‑October momentum in utilization and pricing suggests a manageable year‑end run, but it’s not the kind of surge that clears excess capacity on its own. Prepare for a typical January reset unless inventory drawdowns extend into December.
– Protect margins against fuel volatility. With diesel edging higher, ensure fuel surcharge programs reflect current EIA baselines, and revisit routing guides where all‑in spot offers haven’t caught up to pump prices.
– Keep an eye on upstream green shoots. Any improvement in ISM new orders or regional manufacturing surveys would broaden the demand base and validate October’s price‑over‑capacity trend. Until then, downstream will carry the freight market’s near‑term tone.
Bottom line: October’s LMI shows a market that’s finally moving in carriers’ favor—prices rising faster than capacity—driven by holiday seasonality and improved asset utilization. It’s a constructive shift but not a breakout. The next few weeks will determine whether this firming becomes a durable inflection or a seasonal blip tempered by soft manufacturing and rising fuel costs.
Sources: FreightWaves, IndexBox, TradingEconomics, U.S. Energy Information Administration, Institute for Supply Management
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