Core Insights - The Logistics Managers' Index (LMI) indicates a significant decline in inventory levels and warehouse utilization, suggesting a shift in supply chain strategies for businesses [2][3][5] Inventory Levels - The December reading for inventory levels was recorded at 35.1, marking the fastest drawdown of goods in the history of the index, which began in late 2016 [3] - This decline in inventory levels is the most rapid in the past decade, reflecting a strategic shift by companies [1][3] Warehouse Utilization - Warehouse utilization fell to an all-time low of 42.9, indicating that businesses are actively clearing their facilities [3] - The low utilization rates suggest a move away from overstocking strategies that characterized previous years [5] Trade Policy Uncertainty - Trade policy uncertainty remains high, particularly due to pending Supreme Court rulings on IEEPA tariffs, which account for approximately $131 billion of the $253 billion in tariff revenue collected [3] - This uncertainty may be influencing businesses' decisions to delay new orders as they navigate replenishment strategies [4] Supply Chain Strategy Shift - Companies appear to be reverting to a just-in-time inventory model, moving away from the defensive over-ordering strategies seen in the past year [5] - Leaner inventories increase reliance on transportation services and their reliability, posing challenges for transportation providers who have also been managing lean operations [6]