Update on the State of Freight 2024
As the freight market is always evolving, it is important to take a step back and report on what is changing. The following information is built on market data from public sources regarding current rates, technology, the transportation labor market, and new legislation. All information is current as of March 20, 2024.
WHAT ARE FREIGHT RATES?
Freight rates are to the costs charged for transporting goods from one location to another. The rates can vary largely depending on the type of vehicle used, the distance traveled, the nature of the goods, and other market factors.
Reefer Rates: Refers to the cost per mile for refrigerated trailers, which are used to transport perishable goods that need to be kept at specific temperatures.
Van Rates: Refers to the cost per mile for transporting goods in dry vans, which are the most common type of trailers used for shipping non-perishable goods.
Flatbed Rates: Refers to the cost per mile for flatbed trailers, which are used to transport oversized or heavy goods that do not fit in standard trailers.
TECHNOLOGY TRENDS
Sustainable Logistics
While implementing certain environmental safety measures can be costly, it has proven to be a top priority for shareholders and customers alike. According to IT Supply Chain, it can be difficult for companies to absorb these costs in a low-price environment, inviting the transition from ‘sustainable hardware’ like electric trucks to a more cost-efficient ‘software-driven’ approach, minimizing carbon emissions by creating driving efficiencies.
Seamless Technology Platforms
Integrative software ecosystems are seen as immensely valuable in an industry that offers a multitude of platforms. Software ecosystems must enable seamless workflow between systems for users to reap the benefits. A Transporeon 2024 report found that 74% of leaders believe that becoming more data-driven will benefit their company positively over the next five years and 55% said that investing in supply chain visibility technology will be a priority.
LABOR MARKET
Seasonally adjusted, employment in the transportation and warehousing sector rose to 6,511,400 in February 2024 — up 0.3% from the previous month but down 1.2% from February 2023. Employment in transportation and warehousing grew 16.9% in February 2024 from the pre-pandemic February 2019 level of 5,571,900.
According to ZipRecruiters’s 2024 Transportation & Warehousing Labor Market Outlook, a trend to be aware of is warehouse management systems and companies are increasingly investing in next-generation technologies, such as robotic picking systems, automated guided vehicles, delivery drones, and predictive models. These technologies promise to improve efficiency and help the industry overcome labor shortages, but they will require a large investment in new equipment, software, and tech talent.
A NEW TAX PLAN THAT BENEFITS CARRIERS
A new tax plan is being considered by the Senate and includes a three-year tax package that includes financial benefits for both large and small trucking companies. It passed the U.S. House of Representatives with strong bipartisan support. The Tax Relief for American Families and Workers Act of 2024 “advances several trucking priorities to promote much-needed investments in our supply chain, like restoring and extending 100% expensing for new equipment,” commented Ed Gilroy, the American Trucking Associations’ chief advocacy and public affairs officer, when the bill passed the House. Gilroy added, “We support this bipartisan effort that will pave the way for greater freight capacity, efficiency and innovation while strengthening small businesses and fostering good-paying jobs in the trucking industry.”
“The provisions related to expensing assets is exactly what is needed for someone buying a new truck or rig,” James Lucier, a tax policy expert and a principal with Capital Alpha Partners, a public policy research firm, told FreightWaves. “It would be quite helpful for independent truckers and small businesses involved in trucking.”
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