The Institute for Supply Management's Manufacturing PMI registered 54.5% in September, holding expansion territory for the ninth straight month but slipping 0.1 percentage point from August, the Tempe, Arizona-based group said on October 5. S&P Global's parallel gauge climbed two points to 55.9, painting a slightly stronger picture of factory activity.

Five of the six largest manufacturing industries — computer and electronic products, food, beverage and tobacco, transportation equipment, machinery, and chemical products — expanded during the month, the ISM report showed. The overall U.S. economy grew for the 23rd consecutive month.

What does the price index tell shippers?

The headline number masks a sharp turn on the cost side. ISM's Prices Index jumped 6.8 percentage points to 77.9% from August's 71.1%, a "notable increase," according to Susan Spence, chair of ISM's Manufacturing Business Survey Committee.

"The most recent surge in price growth has renewed my concern about price volatility," Spence told reporters on a media call. "Trade wars, chaos, whatever you care to call it, is really what's affecting inflation."

For shippers, that reading matters. Inputs from steel, semiconductors, packaging and chemicals feed directly into truckload spot rates on industrial lanes out of the Midwest, and a Prices Index above 70 historically precedes contract renewal pressure. Carriers handling those lanes face a tougher negotiation when fuel surcharges and materials costs climb in the same quarter.

What do the order books signal for freight demand?

ISM's New Orders Index rose 1.6 percentage points to 55.3%, its ninth consecutive month of expansion after four straight contractions. The Backlog of Orders Index climbed 4.6 points to 56.4%, indicating order books are filling faster than factories can clear them.

That combination typically translates into tighter dry van and intermodal capacity two to three months out, especially on lanes running from the Port of Los Angeles — where HMM container ships stacked boxes as recently as August 19 — into inland markets. Production, however, slipped 1.6 points to 56.7%, hinting that plants cannot keep pace.

The Customers' Inventories Index fell to 41.6% — ISM labels anything below roughly 43% as "too low" — a setup that historically pulls forward replenishment orders. "Since June, new orders have been in this up-down pattern, up one month and down the next," Spence said.

Employment, which posted 52.7% in September, followed the same choppy cadence. For trucking, the employment signal carries weight: manufacturing payrolls expanded by 16,000 jobs in August, the latest Bureau of Labor Statistics tally.

How are imports, exports and deliveries shifting?

New Export Orders lost 2.3 points to 50.9%, and Imports slipped 1.5 points to 51% — both still expanding, but at a slower pace. That cooling coincides with new U.S. tariffs on Canadian goods and Ottawa's retaliatory duties.

Cross-border drayage flows have already shifted, shippers said. The Supplier Deliveries Index came in at 59%, ISM's tenth consecutive month of slowing inbound performance. A reading above 50% on this sub-index means carriers and suppliers are taking longer to deliver — a freight-positive signal that points to tighter trucking capacity at the lane level.

What are operators saying about tariffs and lead times?

Respondent comments in the September survey ran 60% negative to 40% positive, with pricing volatility cited in 46% of negative remarks, tariffs in 34%, the Iran war in 30% and lengthening lead times in 21%. Most flagged multiple factors.

A computer and electronic products manufacturer wrote that finding alternate sources outside China, local opposition to U.S. data centers, and component shortages are affecting business.

A machinery respondent said orders have doubled in the semiconductor, electronics and government sectors. Delivery times stretched by the same factor, with Canada tariffs forcing supply chain teams to "scramble" over routes that took years to build.

A transportation equipment manufacturer was blunt: "Every month, we are faced with new headwinds created by this administration. This month, it is the trade war with Canada, which every day is getting worse — causing prices to go up and uncertainty that creates massive disruption."

What is the forward read?

Spence called sentiment "certainly worrisome." She pointed to "not being able to rely on a steady economic policy" as the central concern voiced by survey respondents.

With the Prices Index accelerating and the New Export Orders gauge already cooling, shippers entering fourth-quarter contract talks should expect carriers to use the ISM data to defend rate floors. Forwarders managing trans-Pacific and cross-border volumes will need to plan for further disruption if the Canada duties remain in place through year-end.