US Logistics Costs Rise in October on Inventory Expansion

Inventory Expansion Drives October Logistics Costs Up

The United States Logistics Managers Index reached 70.7 in October 2026, marking a 0.5-point increase from September, shippingnewsnet.com reported.

That elevated reading combines higher overall logistics activity with mounting financial burdens for companies securing freight and warehouse space ahead of the late-year shopping season. The inventory levels index climbed eight points to hit 66.9, marking its highest reading since September 2022. Downstream supply chain firms, including retailers, registered an inventory level of 69.6, outpacing upstream companies at 64.1 as goods moved closer to final consumer sales.

Inventory Costs Rise as Warehousing Space Shrinks

Rising inventories generated intense demand for storage space, pushing the inventory costs index up by 8.9 points to 88.8 in October, with readings reaching 92.4 late in the month. Warehousing capacity remained restricted at 43.5, staying below the crucial 50-threshold that separates expansion from contraction. While that figure represented a slight upward tick from the previous month, it indicated that available space continued to shrink, albeit at a slower pace. Upstream suppliers faced severe constraints with a warehousing capacity index of 37.5, compared to 50 for downstream firms, suggesting that retail goods bypassed traditional storage nodes to land directly in stores.

Warehousing prices climbed 7.2 points to 80.7. Non-traditional pressures, such as data center construction material storage and outdoor yard stacking demands, compounded the space crunch in specific regions.

Carriers Face Capacity Limits While Freight Rates Climb

Transportation capacity rose by 3.6 points to 38, signaling that the contraction in transit availability eased slightly while supply constraints remained firmly in place. Cautious capital investments by carriers, barriers keeping smaller operators out of the market, and persistent driver shortages all restricted the speed of recovery in the sector.

Transportation prices declined by 4.7 points to 88, showing that freight rates continued to climb but at a more moderate pace than before. Freight data provider SONAR indicated that new truckload contract rates ran 13.11% higher than legacy agreements, with elevated spot rates and rejection rates threatening to pull future contract pricing upward.

Commercial Operators Face Rising Cost Pressures over Twelve Months

The overall 12-month LMI outlook settled at 69.1, with forward-looking indices for inventory costs at 81.3, warehousing prices at 79.3, and transportation prices at 90.

The combined total for October inventory costs, warehousing prices, and transportation prices reached 257.5, hitting its highest aggregate level since March 2022 and keeping cost pressure high for commercial operators.