Navigating the 2024 Freight Market:
Shippers and Carriers

The freight industry has faced significant challenges since the start of the pandemic in 2020 with carriers and shippers grappling with a turbulent market.

However, the market continues to shift and we’re likely to see more positive changes and conditions for carriers while shippers will likely see rising shipping costs. The lack of freight capacity is continuing to correct itself and we will see the fate rate cycle move at a faster pace in 2024, likely increasing rates. Additionally, carriers may find themselves in a stronger negotiating position with shippers during this period.

So, what can shippers and carriers do to prepare for the anticipated changes in the market?

LTL and FTL Shippers: Strategies for the Changing Landscape

With market conditions currently stable and the full truckload (FTL) market at an all-time low, now is the time for shippers to consider new strategies once rates increase and capacity tightens. FTL shipments are reporting strong route guide performance and declining rates for contract and spot loads. Yellow’s shutdown combined with driver shortages, we’re likely to see less competitive pricing for LTL shipments.  

Benchmark Freight Costs: Shippers should begin by benchmarking their freight costs against industry data. This will help them gain insights into market trends and assess the competitiveness of their rates.

Prioritize FTL routes: With costs at a seven-year low and ample supply, shippers should take advantage of prioritizing FTL routes. FTL shipments increase efficiency with fewer stops and decreasing transit time in addition to improving tracking and visibility.

Lock in Contract Rates: To mitigate rate volatility, shippers can consider locking in contract rates with carriers. This provides stability and predictability in pricing, even as market conditions fluctuate.

Explore Index-Linked Contracts: Index-linked contracts can be a valuable tool for managing rate and capacity risk. These contracts are tied to industry indices, allowing rates to adjust based on market conditions.

Control the Process: Integration between systems will help streamline processes and provide end-to-end visibility and control. The ability to follow your entire shipment from point A to point B allows you to provide better service to your customers, giving them peace of mind.  

Collaborate with Experts: Seeking assistance and partnership from industry experts can be beneficial. The use of a comprehensive TMS system that is supported by freight industry strategists can allow you to focus on your business without getting into the specifics and continuously changing logistics of the market.

Carriers: Preparing for a Brighter Future

After enduring more than 18 months of challenging conditions, carriers are finally seeing a light at the end of the tunnel. Yellow’s exit from the market is driving carriers to look closely at absorbing the volume and ways to ensure additional profitability and maintain service-level expectations. This will take several months (into 2024) for the market to adjust to the exit.

Here are some strategies carriers can adopt to make the most of the expected upturn:

Right-Size Your Business: Carriers should continue to right-size their operations. This involves optimizing their fleet size and distribution networks to meet the expected increase in demand efficiently.

Cost Reduction: In an unpredictable market, cost reduction remains a top priority. Carriers should explore ways to cut costs without compromising service quality.

Prepare for Higher Volume and Rates: With a more favorable market outlook, carriers should be ready to handle higher shipment volumes and potentially negotiate better rates.

Enhance Service Quality: To attract and retain shippers, carriers should focus on offering excellent service. This includes maintaining on-time deliveries, efficient communication, and addressing customer concerns promptly.

For both carriers and shippers, access to accurate and real-time data is invaluable in making informed decisions while simultaneously providing comprehensive pricing, demand, and capacity data across all modes of transportation.

As the market outlook for 2024 appears promising, carriers and shippers should proactively implement these strategies to maximize their competitiveness and adapt to changing market conditions. By doing so, they can navigate the evolving freight landscape with confidence and thrive in the coming year.

Dynamic Logistix is a third-party provider of shipping and freight solutions that combines a world-class technology platform with stellar personal service. Clients save time and money by receiving superior visibility, transparent processes and comprehensive real-time reporting through our transportation management software.