Supply chain activity is growing at its fastest rate in over four years. With shippers front-loading inventory ahead of this year’s tariff deadlines, excess stock is now moving through the warehouse network. The industry is already feeling the squeeze, from carriers scrambling for dock space to shippers absorbing rent hikes.
The Logistics Managers’ Index, a monthly survey of logistics executives on inventory, warehousing, and transportation conditions, recently rose above 70 for the first time since March 2022. The index scores conditions on a scale of 0 to 100, with readings above 50 signaling expansion and readings above 70 representing significant expansion.
The last time logistics managers reported growth this fast, the industry was digging its way out of pandemic-era backlogs.This time, tariff-fueled stockpiles are driving the jump. The LMI report ties the increase directly to retailers “rushing inventories forward to avoid tariffs,” bringing in Q4 holiday goods ahead of schedule in order to outpace new duties the U.S. may impose in late July.
Which Metrics Are Moving?
According to the LMI report, inventory levels rose 5.7 points to 60.5, which the report identifies as the driver behind June’s spike. The biggest move, however, was warehousing utilization. The metric climbed 6.5 points to 69.4, its highest reading since September 2022. Transportation utilization climbed 5.2 points to 74.7, a new eight-year high.
Notably, warehousing capacity moved the opposite direction. It slipped down 3.0 points to 47.5, sliding back into contraction after a brief stretch of mild expansion in May. That reading is roughly flat versus a year ago and down 5.1 points from two years ago.
Warehouse capacity is tightening at the exact moment inventory and utilization are surging, creating a squeeze that’s already showing up in pricing. Warehousing prices are up 5.5 points year-over-year and 9.3 points from two years ago.
LMI respondents don’t expect the pressure to ease in the near-term future. They’re forecasting warehousing utilization to climb further, reaching 72.5 in the months ahead.
What Does the Real Estate Data Say?
The LMI measures how tight capacity feels to the companies renting space, while commercial real estate data reveals the levers behind the tightening. Current data points to a supply problem rather than a demand blip.
CBRE’s Q1 2026 industrial figures show leasing activity up 14% year-over-year to 249.8 million square feet, putting it on pace for a record year. Net absorption rebounded to 43.1 million square feet, but construction completions slowed to 55.4 million square feet, still barely keeping ahead of demand. National vacancy sits at 6.7%.
Prologis’s research, published in May, shows that new warehouse deliveries are on pace to hit roughly 190 million square feet in 2026, the lowest level in a decade and about 20% below the pre-pandemic average. Prologis expects full-year net absorption near 200 million square feet, up from 2025.
Demand is on track to outrun new supply for the first time since the pandemic-era buildout ended, and Prologis is telling its investors to expect vacancy to contract by year-end. Rents already turned positive in Q1, the first increase since 2023.
Industry-wide utilization is still running around 84%, which is below the long-term average. Still, the Prologis research made it clear that scarcity is “emerging in select locations and building types.”
Real estate data is consistent with what the LMI is highlighting. Shippers in the markets and categories where scarcity is already showing up are the ones driving the warehousing capacity reading below 50, even while the national number still looks quite a bit looser.
The Whole Picture
Together, the two data sets suggest that the industry has spent several years underbuilding. Construction is still sitting near decade lows, and demand is accelerating faster than that pipeline can respond. A normal cycle absorbs a demand spike with new supply coming online, but this cycle doesn’t have much supply queued up to absorb it.
For shippers, the data suggest that this may be more than just a one-month index reading. Contracts signed even a year ago were priced before this run-up, and rent growth turning positive in Q1 is an early signal. Shippers renewing space this year are negotiating at the bottom of the rent cycle. That negotiating window narrows as demand keeps outpacing supply. The smartest move right now is likely to lock in space and rates.
The next LMI report and Prologis’s next quarterly update will provide more context around this trend. Those numbers will show whether June’s inventory build was a one-time front-load ahead of this year’s tariff deadlines or the start of a longer run, as well as whether vacancy is actually contracting as expected.