Reading the Signals: Why Logistics Feels Early-Cycle Shifts Before Manufacturing

For most of the past two years, operations leaders have lived inside a paradox: headline macro data has looked stable, but the day-to-day reality on the floor has been anything but. Volumes have arrived in uneven waves. Forecasts have whipsawed. Labor plans that looked sensible on Monday were often obsolete by Thursday.

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Over the past few weeks, however, several signals have begun to align. Freight indicators suggest conditions are stabilizing relative to late-2025 volatility. Forward-looking demand measures are reaching levels not seen since 2022. Several industrial earnings reports have been more resilient than many expected entering the year.

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Taken together, these developments suggest the early stages of a potential demand inflection, one that is likely to surface in logistics before it fully materializes in manufacturing.

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What the Freight Market is Signaling

One of the clearest directional signals is coming from freight markets. FreightWaves founder Craig Fuller has recently pointed to improving conditions across parts of the freight network, noting shifts in inbound flows and tighter truck availability in certain regions. In an X post circulating across industry circles, he wrote: “Good luck finding a truck in Iowa.” The point is not that capacity is tight everywhere. It is that conditions are changing, and not uniformly.

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Looking back over late 2025, the Cass Freight Index reflected a similar pattern. While national shipment levels remained soft relative to prior peaks, certain regions, particularly in the Midwest, showed sharper and more uneven movements. When freight markets begin to turn, they rarely do so evenly. Stress tends to surface first in specific regions, lanes, and days of the week before it becomes visible in national aggregates.

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Freight often moves ahead of manufacturing because retailers and distributors adjust inventory positions before factories materially change production schedules. As order patterns shift, warehouses and carriers experience the variability immediately, even while plants are still recalibrating suppliers, labor, and output plans. That lag explains why early-cycle improvement often looks volatile inside logistics before it looks stable in factory production data.

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For warehouse and DC leaders, this kind of uneven demand is often harder to manage than steady growth. It produces compressed receipt days and outbound bunching that complicate labor planning and daily execution.

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The Forward-Looking Gap

This freight story aligns with the latest manufacturing data. The ISM Manufacturing Purchasing Managers Index (ISM) recently returned to expansion at 52.6%, its strongest reading since 2022.

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Even more telling is the Bank of America Truckload Diffusion Indicator. The latest reported reading in early February 2026 was 60.7, a level not seen in nearly four years. The indicator tracks shipper expectations for the next zero to three months.

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Historically, readings at this level have preceded firmer spot rates, more volatile capacity conditions, and tighter scheduling windows. For operations leaders, a 60-plus reading rarely translates into smooth growth. It more often appears as compressed peak days, shorter notice windows, and more last-minute schedule adjustments inside warehouses and DCs. For example, a distribution center might see several quiet days followed by a receipt surge that overwhelms the plan.

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Why Logistics Feels the Recovery First

If this cycle follows historical patterns, the recovery will be felt in stages:

• Freight tightens first.
• Warehouses absorb the volatility.
• Manufacturing ramps later.

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Warehouses and DCs experience the volume shift first, but it arrives in uneven bursts rather than a steady climb. Plants respond to firmer order books more gradually, often months after logistics has already absorbed the variability.

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The Planning Problem: The Limits of Fixed Labor

Many facilities still manage labor as if demand will arrive smoothly. They staff to a baseline forecast, layer in overtime when volumes jump, and scramble with ad hoc fixes when the plan breaks down. This approach works in stable environments. It performs poorly in volatile ones.

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The real challenge is not simply having enough people. It is having the right people at the right time, day by day, without locking in unnecessary fixed costs.

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When labor is treated as a fixed resource, operations end up stuck between two bad outcomes:

• In slower weeks, facilities are overstaffed, productivity drops, and cost per unit rises.
• In busy weeks, facilities are understaffed, leading to firefighting, safety risk, and missed ship dates.

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How On-Demand Labor Changes the Math

Veryable’s on-demand labor Marketplace allows facilities to post individual paid shifts, called Ops, which independent workers, called Operators, choose to work. In practice, this gives operations leaders a straightforward way to add labor for a specific day or shift when work spikes, without permanently expanding their core workforce or defaulting to overtime.

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When volumes arrive in uneven waves, this changes how a facility operates day to day. Instead of staffing to a forecast and hoping for the best, leaders can align labor with what is actually happening in the building. If receipts back up or containers surge, they post Ops and bring in Veryable Operators. If the building is slow, they simply do not post work. As a result, labor costs rise and fall with real activity rather than predicted activity, which protects margins during lumpy periods.

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Because Veryable Operators work alongside full-time employees in areas like receiving, picking, packing, and loading, the platform also changes the experience for the core team. Leaders gain another buffer besides overtime, reducing burnout and last-minute scrambling while protecting safety and service levels.

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The long-term value of the platform is the creation of an On-Demand Labor Pool. Facilities build this pool by consistently posting work and designating high-performing Operators into their site’s preferred group. When volumes run hot, leaders can prioritize this group for available Ops, allowing them to scale with workers who already know the building and can hit the ground running.

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In short, on-demand labor gives operations leaders a practical way to scale labor day by day, helping keep productivity and cost per unit more stable through both peaks and valleys.

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What 2026 Will Demand from Operations

The freight and forward indicators suggest that any acceleration in growth is unlikely to unfold as a steady climb. It is more likely to surface as uneven volume shifts that test how quickly operations can adjust capacity. The advantage will go to companies that can respond in real time as workload changes, rather than those relying solely on forecast accuracy.

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To gauge how conditions evolve over the coming months, watch three signals closely:

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Bank of America Truckload Diffusion Indicator
If the indicator remains elevated, it suggests sustained forward demand expectations. In practice, that often shows up as shorter notice windows and more compressed volume days inside warehouses and DCs.

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ISM New Orders versus Employment
A widening gap between New Orders and Employment indicates that demand is accelerating faster than permanent hiring. That gap often translates into near-term execution pressure on the floor.

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Regional Freight Clusters
Localized volume spikes in the Midwest and port-adjacent lanes are early signs that capacity is tightening unevenly. When those pockets intensify, variability across distribution networks typically follows.

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