LCI Highlights Industry Sentiment for Q3
Jeff Berman | Logistics Management
June 27, 2023
Markets could be driven by increased consumer demand or increased sales/promotions to clear stagnant inventory, or both.
“Revenue growth projections for Q4 from our Q3 survey are likely to improve going into retail season,” Jason Lockard, SVP of Managed Logistics at BlueGrace, told LM. “Markets could be driven by increased consumer demand or increased sales/promotions to clear stagnant inventory, or both.
Looking at inventories, BlueGrace found that positive inventory sentiment stumbled from 57% in the second quarter to an anticipated 33% for the third quarter, with neutral inventory sentiment increasing from 30% to 53%, which it said indicates “a growing uncertainty.” And it found that negative inventory sentiment was flat, at 13%.
Lockard explained that sentiment and confidence indicate inventories are still high going into the third quarter, adding that the cost to get that product into customer networks was higher than normal.
It’s likely to expect more of a conservative approach to inventory management for the remainder of 2023
“It’s likely to expect more of a conservative approach to inventory management for the remainder of 2023,” he said.
With inventory sentiment on the decline, BlueGrace said that positive order sentiment saw a slight rise, from 40% in the second quarter to 45% in the third quarter, with neutral order sentiment falling from 53% to 43%, for the same period, and negative order sentiment going from 7% to 11%.
When asked if these order sentiment readings are indicating that carriers and logistics services providers are still dealing with a low-demand environment, Lockard said that truckload volumes and rates are at or near the anticipated “bottom” however less-than-truckload (LTL), despite volumes being down year-over-year are not at critical levels and have held pricing and commodity standards in place.
“There was a shift from truckload (TL) to LTL as overall over shipment size decreased in many supply chains,” he said.