Freight and logistics, the road ahead in 2024
2024 is around the corner, are you wondering what the road ahead holds? Here at Jenkar, we are always planning ahead so we can keep up with this constantly changing industry. We have carried out some research and identified several key predicated changes that we feel you need to be aware of. Please read the below in order to stay on top of your freight requirements.
Air Cargo Recovery:
After a difficult year in 2023, Air cargo demand should certainly see a strong recovery. Accenture Cargo have predicted a 4.7% year over year growth in 2024. While this won’t reach the 2022 levels of demand, it will show significant growth in some of the severely impacted transpacific lanes in addition to strong growth on intra-APAC shipping.1
Increased Freight Costs:
In 2024, shippers can expect to encounter increased freight shipping costs. This is anticipated as a result of a projected shift, where pricing power swings back towards carriers. Yet, the upcoming phase in the freight cycle might pose greater challenges for freight brokerages compared to shippers. A growing preference among shippers for asset-based carriers in their routing guides has led to reduced business for brokers.2
Market Conditions for Road Carriers:
The market conditions for road carriers are showing signs of improvement, with tender rejections on pace to surpass the previous year’s number. However, there is still an over-capacity in the market, with too many hauliers/trucks chasing too little freight. This situation is expected to correct itself over the coming months, leading to a likely increase in freight rates.3
Spot Market Changes:
In the spot market, there’s a continued low number of load postings. The industry is still expanding its capacity, even with a decline in spot equipment listings. The process of reducing overcapacity is accelerating, and as freight volumes begin to increase, it indicates that rate trends are likely to change in 2024.4
Diversification and Sustainability:
Shippers should diversify their logistics networks in 2024, moving away from on over-the-road trucking. The industry is increasingly focusing on technology and environmental considerations. Smaller carriers especially are being encouraged to innovate and invest in sustainable practices.5
Rail As An Optimal Shipping Option:
You should expect rail transportation to become more enticing. This will be because of improvements in service, sustainability, and technology taking place. With supply chain congestion diminishing and the introduction of innovative service solutions, rail is emerging as a viable and cost-effective option for shippers. The biggest downside being reliable and extensive networks not being a global fixture.6
In 2024, shippers will significantly focus on environmental stewardship, finding rail, slow steaming and other CO2 friendly options more appealing than trucking, due to the fact it offers lower emissions and greater fuel efficiency.7
Digital Transformations in 2024:
In 2024, the global logistics market is swiftly adapting to digital innovations. Technologies like AI, blockchain, and IoT are transforming traditional processes, leading to more efficient operations and better customer experiences. AI is optimising routes and forecasting demand, while blockchain ensures secure, transparent supply chain tracking. IoT devices monitor goods in transit, further enhancing operational efficiency. This digital shift is making the logistics industry more agile, transparent and customer-focused environment.
These predictions indicate that the freight and logistics industry is poised for a year of recovery and transformation. There will be a strong focus on sustainability, technological innovation, and a shift in market dynamics.