The holiday season marks the special time of year when we reflect on the year that is ending and shift our focus to the year to come. The last few years have seen many twists and turns in the freight logistics industry, and 2024 is likely to be no exception. Here are some upcoming trends and predictions for the freight market in 2024.
Trucking Demand is Up
Demand isn’t what it was during the pandemic, but it’s been growing steadily since 2023. This is likely due to the fact that consumption is on the rise and inventories are stabilizing. However this isn’t something that many carriers will notice because so many new carriers entered the field in recent years.
Capacity is Down
The Outbound Tender Rejection Index (OTRI) measures the number of contract loads that carriers reject and is used as a metric to understand available capacity. In early December, the rate was 3.76%, and last year it was 3.86%. These figures show that carriers are taking almost every load they are offered and, as a consequence, there is little capacity to spare.
Cargo Volume is Up
Now that inventories have recalibrated and consumer demand for products is increasing, the economic demand for goods is on the rise as well. With the Inflation Reduction Act (IRA) driving money into the economy, manufacturing businesses are opting to work in the U.S. All of this translates to large cargo volumes that can bode well for carriers looking to maximize each load.
Carriers May Have the Upper Hand
Year to year, and quarter to quarter, the balance of negotiating power shifts between shippers and carriers. Many sources predict that the negotiating power will swing back towards carriers, giving them the upper hand in 2024. This will translate to higher volume and rates, making 2024 a great time for carriers to offer volume and service to customers. After many tough months for carriers, 2024 is likely to be the year they can focus on improving their bottom line.
Turmoil and Disruptions
The substantial amount of global turmoil currently underway is bound to impact the freight logistics industry in 2024. Due to escalating wars and economic instability, we will likely see changes in government fiscal spending. These changes will inevitably affect businesses and assets, and it’s crucial that professionals prepare to ride out any storm.
Tech Innovations
The capabilities and applications of Artificial Intelligence (AI) are rapidly evolving and making waves across industries. The freight logistics industry is no exception. 2024 will likely be another year marked by digital transformation that creates new opportunities for boosting both productivity and profit.
New Regulations
A number of fleet regulations are on the horizon. As the laws take effect, they will begin to impact earnings, business, and the overall market. Here are three regulations that logistics professionals need to be aware of:
- Advanced Clean Fleets (ACF) Regulation – Starting in the new year, California fleet companies will need to follow specific rules when acquiring new vehicles. While this may not seem relevant to those outside of California, it is important to make note of this fleet sustainability measure because it will likely spread to more states.
- The Corporate Transparency Act (CTA) – Although not specific to freight logistics, the CTA requires businesses to disclose ownership information to the public starting January 1, 2024. The CTA aims to improve transparency and combat financial crimes like money laundering and tax fraud.
- Consumer Privacy Laws – Texas, Washington, and Oregon are set to implement new consumer data privacy laws in 2024. Freight logistics companies that operate in those states should review their current data collection practices and create procedures to implement when the laws go into effect.
Partner with First Star Logistics to Make 2024 a Strong Year
Working with an experienced freight broker can make shipping freight a breeze. A broker can arrange for the shipment of your goods, select quality carriers for your jobs, and skillfully manage any issues that may arise. The best way to find a freight broker who has your back is to partner with an experienced logistics provider.
First Star Logistics is a unique asset-based global brokerage company with over 60 years of experience. We take great pride in meeting the needs of our customers, carriers, brokers, and agents. For our customers, we understand that efficiency, safety, and reliability are crucial. We use fast, cutting-edge technology to ensure a satisfactory experience with our specialized shipping services. We support our carriers with the technology, management, resources, and support they need to ensure safe, on-time delivery for shipments. We provide our agents and brokers with a dedicated management team and proprietary software that empowers our employees to succeed.
To get 2024 off to a good start, contact First Star Logistics today!
