2024 Freight Market Recap
What has turned out to be a fairly unpredictable year for the domestic transportation and freight markets isn’t easing up yet. In fact, as we move toward the final month of 2024, the pending change of the U.S. presidential guard, talk of higher import tariffs, and differing opinions about how peak season will play out are all keeping supply chain and logistics managers up at night.
The issues are especially bothersome for companies that rely on aging, on-premises transportation management systems (TMS) and other disparate solutions to provide a clear picture of the current market situation…and what’s coming next. By the time these shippers get their arms around the current challenges, in fact, a new set of obstacles is usually already cropping up.
With the year officially in “wind down” mode (despite the chaos of the holiday season), this is a good time to reflect on key freight trends that stood out over the last 11 months, assess your current situation and lay out plans for 2025.
Revenova CEO Charles Craigmile says that most of 2024 was characterized by “sluggish” demand for hard goods—those consumer and industrial products that move over the road. The early signs of this trend emerged in mid-2023 and didn’t let up as the year progressed.
Credit the high interest rates, inflation (which the Federal Reserve says it now has under some level of control), and consumers’ negative sentiment about the national economy with driving down demand for hard goods. “The post-pandemic spending spree of 2021 and 2022 is basically history,” says Craigmile. “As a result, part of 2023 and all of 2024 were sluggish in terms of trucking tonnage, the number of shipments, and overall shipping volume.”
On a positive note, Craigmile does see some “green shoots” emerging, with the optimism tied mostly to the seasonality of the logistics calendar. “As the holidays arrive, activity spikes a little bit more,” he says, “with the broader headline still being that the markets were sluggish for most of the year.”
Third Quarter Reports
In late-August, Commercial Carrier Journal (CCJ) reported that the freight market had “generally stabilized,” with supply and demand holding steady compared to previous months. Citing Uber Freight’s third-quarter freight market update, CCJ said supply and demand in the previous quarter showed little change, maintaining a 1.2% year-over-year increase.
“The rise is likely attributed to a 2.3% increase in real consumer spending on goods and a 10.4% increase in containerized imports compared to the previous year,” the publication adds, noting that Uber expects more supply to exit the market and demand to remain mostly flat. It also says that David Spencer of Arrive Logistics, doesn’t expect “any meaningful changes to supply and demand outside of the longer-term trends they have seen with slow capacity exits and relatively stable demand.”
According to U.S. Bank’s third-quarter Freight Payment Index™ report, shipments and spending indices dropped 21% year-over-year—a signal of a potentially slow recovery. Despite some optimism that the truck freight market would begin to recover from continued downward pressure during the third quarter, the bank’s national freight metrics showed that challenges remained for motor carriers with both shipments and spending softer during the third quarter of 2024.
“While there are positive signs for the freight market, these results are an indication that any recovery will be slow,” the bank states in its report, noting that the freight market began to change significantly in late-2022 due to a slowdown in the goods- economy, including slowing household consumption of goods, home construction activity, and manufacturing output. The largest reductions in truck freight volumes were during the second half of 2023 and the first quarter of this year, with an average drop in shipments of 7.4% (quarter-to- quarter) over that period.
There are some bright spots in the bank’s report. For example, it says that the “sequential declines continued in the third quarter of this year, with the U.S. Bank National Shipments Index decreasing 1.9% after a 2.2% drop in the second quarter. This is a much slower decline than late last year and earlier this year.”
When the Going Gets Tough, Tech Can Help
In this unpredictable transportation environment, being able to adapt quickly and make informed decisions are table stakes for organizations that want to operate efficiently, maintain profitability and meet growing consumer demand. Craigmile says innovations like artificial intelligence (AI) and machine learning (ML) are both helping companies manage in this dynamic, unpredictable freight market.
“Companies have to be able to process quotes faster, manage the quote-to-cash process and provide very high levels of visibility to their customers—all while dealing with an ongoing labor logistics, warehousing, and transportation labor shortage,” Craigmile points out. “There are so many opportunities for AI to accelerate these processes, cut down on the amount of manual intervention needed and free up labor to focus on more strategic projects.”
Next year, for example, Revenova will introduce AI-infused TMS capabilities that accelerate the automated quoting, invoicing, bill of lading, and other processes that can consume a high degree of resources when managed manually. These types of AI tools can help organizations prepare for what’s coming next in the freight markets for 2025.
“Right now it’s still very much ‘wait and see,’ but we’re optimistic about some economic stimulants that may emerge soon,” Craigmile predicts. “We do expect improvements in 2025 versus 2023/24, but like most everyone else in the industry, we’re approaching it with a dose of cautious optimism.”
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