The Logistics and Distribution Index, or LoDI, measures traffic on rivers, rails, roads and runways and uses the data to generate a number between one and one hundred. The higher the number, the healthier a region’s logistics industry.
“Because this number is an indicator of logistics and distribution activity in the upcoming month or quarter, companies can look at this number and see if there’s an uptick, maybe they will get ready for some additional hiring,” says Sunderesh Heragu, who helped develop LoDI.
Right now, LoDI only applies to the Louisville area. But Heragu hopes to adapt it to the national level.
“In the media, you see every month they report the Purchasing Managers Index or the University of Michigan’s Consumer Confidence Index. There are many indices out there, but we hope for the logistics industry, this would be a useful point of data,” he says.
Heragu has tested the index for two and a half years and says it’s mostly accurate, but, like many other indices, it can’t anticipate drastic shifts in the market. So far, he says General Electric officials have expressed an interest in using LoDI.