Imports and inventories stabilize in 2026, but for how long

Seasonal fluctuations are normal, as shippers go through restocking and destocking periods throughout the year. These peaks and valleys can tell us how successful they have been in forecasting demand. The relative flatness indicates they have been extremely efficient in optimizing inventory.

In late 2021, bookings were already relatively high, as shippers were facing significant supply chain challenges that eased rapidly in 2022, when demand fell and their over-ordering strategy caught up with them. The LMI inventory level reading went from 58.8 in November 2021 to 80.18 in February 2022.

Importers did not shift their strategy until that summer, when the IOTI fell nearly 40% from June to October. The IOTI remained subdued into mid-2023 while inventory levels contracted. The great destocking waned in late 2023 and was replaced in 2024 by a period of rebuilding. The IOTI averaged nearly 15% higher in 2024, while the LMI closed the year averaging a healthy expansion reading.

Tariffs and erratic trade policy heavily influenced 2025, with the IOTI spiking to COVID-era highs in summer, then plummeting in fall, netting an expansionary inventory situation until the end of the year, when inventory levels contracted at the fastest pace in the index’s history.

This past year has been far less chaotic, but possibly no less nerve-racking, as shippers navigate rapidly expanding transportation and inventory costs in a very shaky consumer environment. Politics have become increasingly intertwined with economics, making many uneasy about the state of things despite the aggregate figures painting a fairly stable picture.

So far, taking a down-the-middle approach to ordering and expectations has worked well in aggregate. The IOTI and LMI figures have been historically consistent, indicating that businesses are selling about as much as they are ordering. This works well in a stable economy, but it is a fine line to walk. This year’s holiday season is one of the most challenging to predict — one that has left the nation’s top economic minds struggling amid all the moving parts.

Looking at the chart above, history would be a poor predictor of what happens next, as each of the past five years has looked nothing like the one before it. Shippers will have to decide whether simply doing more of the same makes sense, but it would be wise to monitor the situation closely and have contingencies ready so they can react quickly if they want to close out the year on the right foot.

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