The LMI’s Fastest Expansion in Three Years Comes With a Warning
By: Logistics Management
The April Logistics Managers’ Index came in at 69.9—its fastest rate of expansion since March 2022—driven by a freight market that is tightening faster than most operators anticipated. Transportation prices grew at their highest rate in the index’s nearly 10-year history, while transportation capacity simultaneously contracted to its lowest recorded level. The LMI’s authors describe the current market as having “never previously become simultaneously tighter or more expensive.”
The underlying cause is a convergence of pressures, and LMI team’s read is direct: they expect the combined impact of tariffs and the Iran conflict to show up meaningfully in GDP within two to three months. The back half of 2026, in their framing, carries real risk.
CAPSTONE TAKEAWAY
The LMI is effectively surfacing two simultaneous decisions that supply chain leaders are being forced to make right now: how to manage transportation cost exposure in a market that is both more expensive and less available, and how to adjust inventory positioning without creating warehousing cost problems on the other side. Those two levers are pulling against each other. The organizations that navigate this well will be those with the operational flexibility to shift strategies quickly—adjusting storage, resequencing inbound flows, and recalibrating labor—without treating each change as a capital project. If the LMI’s inflation forecast plays out this summer, the window for proactive adjustment is shorter than it looks.
Port of LA Volume Is Up. The Conditions Behind It Are Fragile.
By: Supply Chain Dive
The Port of Los Angeles processed nearly 891,000 TEUs in April—its strongest month since August 2025 and a 5.7% increase year over year. Spring and summer merchandise is moving through on schedule, with back-to-school products and early holiday inventory already in the pipeline. The volume strength is real; but the operating environment around it is not stable.
The closure of the Strait of Hormuz has reduced traffic through a waterway that typically handles more than 100 ships per day to a “handful.” Beyond fuel, the closure is affecting manufacturing inputs—aluminum, plastics, resins, fertilizers—with downstream effects already showing up in airline operations: more than 2,600 flights across Asia were canceled or delayed in a single week due to fuel costs. Even if a peace agreement were reached today, Executive Director Gene Seroka was pointed: reopening the strait is just the first step. Unwinding the vessel backlog and restoring normal schedules would take months.
CAPSTONE TAKEAWAY
April’s port numbers are an encouraging data point, but they reflect planning decisions that were made 90 to 120 days ago. The more relevant question for supply chain leaders is what their network can absorb over the next 90 to 120 days, as the cumulative effects of fuel costs, manufacturing input disruptions, and freight rate increases begin to compound. Distributed capacity, flexible labor models, and 3PL partners who can adjust throughput without requiring long lead times to respond are not contingency assets; they are urgent operational requirements.
Retail Sales Are Up Seven Straight Months. Read That Carefully.
By: Supply Chain 24/7
Total U.S. retail sales reached $757.2 billion in April, up 0.5% from March and 4.9% year over year—marking the seventh consecutive month of growth. Non-store retailers, the category that captures e-commerce, posted an 11.1% year-over-year increase, one of the strongest performances across all segments. Clothing and accessories, sporting goods, and health and personal care also showed substantial gains.
The nuance worth holding onto: consumer sentiment remains soft, and analysts note that some of April’s headline growth is being driven by higher prices on essentials rather than pure volume expansion. NRF’s Matthew Shay acknowledged the contradiction directly—retail continues to grow despite higher gas prices, inflation concerns, and cautious consumer confidence. The spending is happening, but it is not uniformly confident spending.
CAPSTONE TAKEAWAY
Seven months of retail growth in a soft-sentiment environment is a signal that fulfillment performance—speed, accuracy, and returns experience—is holding up consumer behavior even when wallet confidence is shaky. E-commerce’s 11.1% year-over-year growth does not happen in a skeptical consumer environment unless the delivery experience is consistently meeting expectations. That puts real pressure on the operations behind the number. Volume growth at that pace, against a backdrop of rising freight costs and tightening capacity, means fulfillment operations need to be doing more with less margin for error.
The brands that maintain service levels through this period will be better positioned when sentiment recovers; the ones that let fulfillment quality slip will find that consumer loyalty is harder to rebuild than it looks.
87% of E-Commerce Companies Plan to Move Manufacturing. Distribution Is Why.
By: Supply & Demand Chain Executive
New research from Fidelity Fulfilment finds that 87% of e-commerce businesses are likely to change their primary manufacturing locations within the next three years—a scale of supply chain restructuring that would have seemed unlikely even two years ago. Nearly as many (86%) say they plan to open additional fulfillment centers over the same period, reflecting a parallel shift toward more distributed fulfillment networks.
When asked to identify their single most important strategic priority, e-commerce leaders placed customer experience first at 23%—ahead of both cost savings and sustainability, each at 19%. That ranking is the thread connecting the manufacturing location decision to the fulfillment network expansion: companies are restructuring not primarily to cut costs, but to get closer to customers and reduce the lead times and failure points that degrade delivery experience.
CAPSTONE TAKEAWAY
When 87% of an industry segment says it is likely to restructure its manufacturing geography within three years, the distribution network implications are substantial. Getting closer to the customer—whether through nearshoring, regional manufacturing, or distributed fulfillment—only delivers on its promise if the logistics infrastructure around those new locations can actually perform. A new fulfillment node that is geographically closer but operationally immature does not improve customer experience; it creates new failure points.
The companies making this transition well will be those that treat distribution network design and operational readiness as a single problem, not a sequenced one—and that have 3PL partners with proven capability across multiple regions, not just the markets they currently serve.
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