The supply chain metrics a company really cares about are its own, of course.
But we operate in a broader context that of course impacts decision-making, so it’s good to be regularly in touch with what is going on in the environment.
To do that here at SCDigest we track and generally report on a number of external measures, generally delivered on a monthly basis. Here are some of my favorites.
The Purchasing Managers Index (PMI) from the Institute for Supply Management, which is affiliated with Arizona State University: The PMI is based on a survey of a consistent group of about 300 US procurement managers, who are asked a series of simple questions: are inventories at your company increasing or decreasing? Ditto for production, new orders, order backlog and a number of others.
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I like its “inferred” rate change calculation: if for example, if shipments are up 5% year-over-year and freight expenditures are up 9%, you can infer rates were up 4%.
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Based on those answers, an overall score for each category is calculated in a very easy to understand manner: a score over 50 means on average the metric is increasing, under 50 contracting, with the level away from 50 up or down indicating the strength of the trend.
The PMI itself, which is what gets the headline news, is a composite score based on five of the individual categories. Amazingly, the PMI has been below 50 for 22 of the past 23 months, meaning nearly two years of US manufacturing contraction. That even as the overall economy is showing modest expansion due to the growth in the service sector:
US Manufacturing Output from the Federal Reserve Bank: This monthly measure, which comes out around the 15th of each month for the prior month, is actually part of the broader Industrial Production report, which in addition to manufacturing includes output from mining and utilities.
The monthly index score is relative to the baseline of the average month in 2017, for which the index equals 100.
For almost all of 2024, the index for manufacturing only has hovered around a 99 level, including a score of 99.6 in August. So ponder this: at 99.6, the index is slightly below the baseline year of 2017 now seven years later. It is even further below the highest score of about 107, reach in late 2007.
The Cass Freight Index from Cass Information: This handy report, which is issued on the 12th of each month, is based on the billions of dollars of freight bills Cass pays for its shipper clients, so the data is very real.
It tracks shipments and expenditures by shippers, across modes, but with truckload carriage being the majority.
I like its “inferred” rate change calculation: if for example, if shipments are up 5% year-over-year and freight expenditures are up 9%, you can infer rates were up 4%.
But I like even more the Cass Linehaul Index, which measures per mile US truckload rates before fuel surcharges and other accessorial fees. This metric has been on the decline since mid-2022.
I also look at the monthly Freight Tonnage index from the American Trucking Associations: This is based on input from the ATA’s carrier members.
The index has been flat to down since a sharp drop in early 2023. It sits at 115.8 in August, meaning tonnage is up 15.8% versus the baseline year of 2015, not all that much over nine years.
Finally, I have been lately been paying more attention to the Logistics Managers Index from CSCMP: Started in 2026 from CSCMP and a number of academic partners, the index operates on the assumption that transportation, warehousing, and inventory data is a leading economic indicator. It uses the same “diffusion index” approach of the PMI, meaning a 50 level separates US logistics expansion from contraction.
The index came in at a strong 58.6 in September.
There many more such measures, but think I will end it here. You can find updates on all these metrics here on SCDigest.
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