Report: Supply Chain Pressures Could Keep Prices Higher for Consumers

The U.S. supply chain expanded in September as companies built up inventory levels, but tightening warehousing capacity could make it difficult and more expensive to bring the goods to consumers, according to researchers at Florida Atlantic University and four other schools.

The Logistics Managers’ Index rose to 70.2 in September, up from 66.6 in August, largely driven by rising inventory levels and warehousing utilization. Any score above 50 suggests expansion in the supply chain, while a score below 50 suggests contraction.

Inventory levels rose to 58.9 in September, up 6.1 points from the prior month. Most of the growth in inventory levels came in the first half of September among upstream firms as wholesalers and distributors carried most of the goods. Despite increasing inventory levels, transportation capacity and warehousing capacity contracted further in September, suggesting that system-wide supply chain capacity is tightening and the current capacity to store and transport available goods to retailers continues to decline.

Transportation capacity dropped 5.6 points in September to 34.4, and warehousing capacity dropped 14.2 points to 39.3.

“The warehouse contraction is one of the fastest rates of change we have seen over the 10-year history of the LMI and is likely due to seasonal shopping preparations (largely at the retail level),” said Steven Carnovale, Ph.D., associate dean of graduate programs in FAU’s College of Business and supply chain expert. “The month of October is often when inventories at wholesalers, which are currently at high levels, get transferred down to retailers. Given the cost of freight in today’s market, this will be a key point to monitor.”

Taken together, the September data point to a supply chain that is carrying more inventory while facing increasingly limited capacity to store and transport those goods. If inventory continues to accumulate while transportation and warehousing capacity remain constrained, businesses could face additional costs and consumers could see those costs reflected in higher prices.

The LMI, a survey of director-level and above supply chain executives, measures the expansion or contraction of the logistics industry using eight unique components: inventory levels, inventory costs, warehousing capacity, warehousing utilization, warehousing prices, transportation capacity and transportation prices.

Researchers at Arizona State University, Colorado State University, Rutgers University, the University of Nevada, Reno, and FAU calculate the LMI using a diffusion index to provide a dynamic view of the U.S. supply chain that anticipates economic shifts and trends.

Inflationary effects were reported across the supply chain, according to researchers. Inventory costs rose to 79.9, the second-highest rate of expansion since August 2025, as consumers reported buying durable goods ahead in anticipation of future price increases. Transportation prices rose 2.7 points to 92.7 as fuel costs affect larger carriers and retail prices.

“The global tightening of diesel supply, given the geopolitical conflicts and shipping constrictions, has rapidly increased the cost of fuel, which has a significant impact on the cost of transportation,” Carnovale said. “This, coupled with the tightening capacity, will likely lead to increased upward pressure on prices for the near future.”

Looking ahead, respondents expect a tight, expensive supply chain as inventory grows, but warehousing and transportation firms struggle with rising costs that could be passed on to consumers.

-FAU-