2024 Predictions

2024 Freight Forecast: 10 Predictions from Industry Experts

By
JJ Singh
Blog

Last year, we compiled end-of-year freight and logistics industry predictions. Our expert contributors offered insights that proved to be quite accurate.

In 2023, the freight market faced its share of challenges. We observed a sluggish market, an uptick in acquisitions and bankruptcies, and a strong push toward more efficient operations.

Now, what's in store for 2024? The experts are ready to share their forecasts, and if history is any guide, you’ll want to pay attention.

Back with a fresh set of predictions, our panel of industry veterans is armed with years of experience and an understanding of the nuances of the supply chain.

These professionals shed light on potential technological impacts, market shifts, and emerging trends. Read on to discover the key predictions for 2024 and how they might shape the landscape of freight and logistics.

1. The next freight cycle will start with another external shock from the broader economy in late 2024 or early 2025

“The freight markets are now 22 months into the freight recession. While truck capacity is returning to balance with more normal load volumes, a truly balanced and healthy market doesn't seem to be around the corner. I don't see many green shoots in the broader economy.

Freight cycles are hard to predict, and many start with a sudden shock to networks from the broader economy. We'll likely see another shock to the system (hopefully not as severe as a pandemic) that will kick off the next bull market. Hopefully this will happen in the back half of 2024. Fingers crossed.”

Kevin Hill

Owner of Brush Pass Research

2. Shippers will go back to the basics.

“In my business, I have never been asked what my tech stack looks like by any of my shipper customers. I truly feel that automation is a great tool to utilize as long as there is core fundamental training behind the broker using the software. You cannot automate bad training, and I truly feel that shippers are returning to the basics of service & execution.”

Chris Jolly

Founder of Freight Coach

3. There will be a shift in how visibility and connection are thought of.

“In recent years, visibility has meant tracking. Connection has been transactional. Whether the connection is powering payment, tracking, or load tender and acceptance, it has been a bottoms-up transaction driven mostly by technology companies promulgating their specific solution.

2024 will see growing demand from shippers, brokers, and carriers for true trusted connections starting at the top of the value chain that brings together multiple parties operating in historically disparate digital environments. When we think about verified identity, rates, location + movement, risk management instruments, and settlements, those will still exist with separate vendors but streamlined in a connected ecosystem. This ecosystem we are building simultaneously pulls risk from any company's balance sheet and increases the speed of trade across many players dealing in the truckload sector.”

Michael Caney

Chief Commercial Officer at Highway

4. Shippers will award lanes to brokerages offering customized solutions with value-adds.

“In 2024, shippers are expected to increasingly award lanes to freight brokerages that provide customized logistics solutions and significant value-added services. This shift is driven by the need for more adaptive and strategic supply chain management. Brokerages that excel in offering tailored services, such as advanced route analytics, real-time tracking, and sustainability initiatives, will stand out. This trend highlights a transition from transactional relationships to collaborative partnerships, where the ability to offer personalized, data-driven solutions is key to securing and maintaining business relationships with shippers.”

Lexi Farris

Sr. Sales Manager at Denim

5. The truckload market will likely stay stressed until Q3 2024, but there could be a boost in Q2 due to increased demand during produce season.

“In 2023, approximately 88,000 carriers ceased operations, along with the closure of around 8,000 brokerages. Even as volumes tend to be higher than pre-pandemic levels, they cannot sustain the continued glute of capacity. The challenges posed by double brokering and freight fraud have undoubtedly contributed to the prevailing market conditions. As more carriers and brokers either shut down or have their authority revoked, a gradual reduction in overcapacity within the market is anticipated.

While it's unlikely that we'll experience a significant increase in Q1, given that it is traditionally a slower period after the holiday rush, I anticipate encountering some resistance, with tender rejections possibly rising at a higher percentage as we enter the Q2 produce season. The challenges in the industry are expected to persist into 2024, making it a demanding year.”

Thomas Werdine

Founder at ThinkFreight

6. The Fed will lower rates, leading to an increase in freight volumes.

“Many analysts predict the Fed will lower interest rates around May 2024.

My guess is this provides a short-term boost to the housing market because many of the potential buyers sitting on the sidelines will try to buy at once. Thus, more freight will be moved for things like renovations & new construction. The darker side is that the prices of single-family homes will shoot up.”

Travis Vaught

Demand Generation Manager at Denim

7. Challenging freight market conditions will continue for most of 2024, increasing business risk for both Fleet and Broker businesses. However, many growth opportunities will still exist for a Smart Fleet or Broker business.

“As the freight market comes out of the doldrums, shippers may pay higher prices to ship their Freight later in 2024. Expect the next stage of the freight cycle to be harder on freight brokerages than shippers. Many shippers have started to prefer asset-based carriers in their routing guides, which has meant lost volume for brokers. Lower volumes mean lower margins for brokers. Consequently, many brokers with freight committed to contract rates will see their margins squeezed.”

JJ Singh

CEO of EKA Solutions, Inc.

8. In the next five years, innovation will be led by SmartBrokers, combining deep industry relationships with cutting-edge third-party technology.

“Over the past five years, venture-backed digital brokerages like Convoy and Uber have set the pace for innovation in our industry. They’ve shown how technology can transform freight brokering, making it more efficient and transparent. However, the next phase of innovation will be dominated by SmartBrokers. These traditional brokers have deep-rooted industry connections and are now integrating advanced third-party technologies into their operations. This blend of relationship-driven business and tech-savviness will define the future of freight, offering a more holistic, efficient, and customer-centric approach.”

Bharath Krishnamoorthy

CEO and Co-Founder at Denim

9. The surviving carriers are going to largely “chase the money” around the country to survive as shippers continue to take advantage of lower-than-normal rates.

"In light of the recent Panama Canal challenges, a stark contrast is evident: the LB/LA ports on the West Coast are witnessing historically high volumes while Houston and Atlanta experience lower volumes. This scenario fosters accelerated recessionary patterns in Houston and Atlanta, juxtaposed with stabilization or growth in the Southern California market. In response, surviving carriers will likely 'chase the money' across the country, adapting to these regional imbalances. Expect unusually rapid, region-specific shifts – both inflationary and deflationary – throughout the year, eventually leading to a general trend of nationwide inflation once the market corrects the current oversupply."

Alex Schick

Co-Founder and COO at Alliance Logistix

10. Credit Crunch will continue for asset-lite businesses.  

“We’ve seen several brokerages this past year get into trouble with Asset Based Lines of credit, and as brokerages continue to experience drops in volumes and in rates the temptation to use that capital to fund operations will continue to grow.  As interest rates remain at this high level, we will see brokerages turn to factoring as an added source of control and working capital.”

Sean Smith

VP of Product at Denim

Facing 2024's Freight Challenges: Enhance Your Cash Flow with Flexible Factoring

Navigating 2024’s market swings will require not just foresight but also flexibility. The insights from our experts paint a picture of a sector that's continually adapting to new challenges and opportunities. From technological advancements to economic shifts, staying ahead in the freight industry means being ready for anything.

One key aspect of this readiness is financial stability, and that's where factoring comes into play. In a landscape where cash flow is king, factoring can be a game-changer for freight businesses, especially those looking to adapt to the dynamic market conditions we've discussed. Whether you're dealing with slow-paying clients or looking to expand your operations, factoring offers a reliable way to keep your finances in check.

Are you curious about how factoring can benefit your business in 2024? Learn more about our flexible factoring solutions. Discover how you can transform your financial strategy to meet the challenges of 2024 and beyond.

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