Breaking

Capacity Crunch Hits 11th Month as Freight Rates Surge

Transportation capacity has contracted for the 11th consecutive month, with the Logistics Managers Index Transportation Capacity reading falling to 38 in October, well below the 50-point expansion threshold. The decline from 54 a year prior underscores persistent supply-demand imbalances. October's ISM Manufacturing PMI reinforced the pressure, printing at 55.5 with production reaching its highest level in five years at 59. Customer inventories remain critically low at 41.6—a level characterized as too low, pointing to sustained future production and freight demand. Transportation prices surged dramatically in the index, with respondents expecting readings above 90 within 12 months, signaling no near-term rate relief. New truckload contracts are up 13.11% over prior rates, while spot rates climbed nearly 47% year over year and contract rates reached 52-week highs at nearly 20% above year-ago levels. Tender volumes increased approximately 7% annually, underscoring persistent tightness across trucking networks.