By Todd Maiden of FreightWaves

Supply chain data released Tuesday showed further cooling in transportation markets. The July Logistics Managers' Index (LMI) fell 4.3 percentage points to 60.7, the lowest reading in the data set since May 2020.

A reading above 50 indicates expansion while a reading below 50 indicates contraction.

"While this does still represent a healthy rate of expansion in the logistics industry, it is a far cry from March when the index hit an all-time high reading of 76.2," the report read.  

The transportation prices subindex dropped 11.8 points in the month to 49.5. This was the first time in two years the pricing data was in contraction territory. However, the report noted that the exit rate for the month was 8 percentage points higher than in the beginning of the month. Transportation prices logged a 54.7 reading in the last week of July.

"We will continue to watch this space to determine whether this late July surge was an aberration, or a sign of breaking from the usual July doldrums and peak season coming over the horizon," the report continued.

A 7.4-point jump in available transportation capacity (69.1) drove pricing lower in the month. This was the fastest growth rate for capacity since April 2019. However, the increase in capacity was "much more muted in the last week of July."