Transportation Trend - January 2024
Latest Update in Transportation Trends
January 2024
A yearly round up from the Year 2023 as we ascend into the New Year. Lower freight volumes, high profile bankruptcies, and loose capacity in truckload markets highlights the year of 2023.
Year End Round Up
The transportation industry had a rollercoaster of events last year. From bankruptcies of high-profile players, to the flipping of freight market trends; there was note-worthy news through out the year.
Yellow Corporation, including the five major LTL companies in their umbrella, shut down operations in July after a failed attempt at renegotiating labor contracts. Convoy, a major freight brokerage technology company backed by Jeff Bezos and Bill Gates, shuttered operations as well after only less than a decade in the industry. Capacity freed up in the truckload network with lower volumes of freight moving, and more trucks looking for loads. The industry ended in what is known as the "Cycle Bottoming" phase of the trucking cycle.
Winter Weather
Winter months are here and so are winter snow storms. Capacity at LTL terminals have generally been tight and any storm may have a ripple effect through out terminals. When snowstorms occur, all terminals in the network are impacted as freight destined to limited operations terminals can no longer move. If you have an important shipment, please contact our customer service team for best case options.
As we head into winter months, it's important to keep in conversation with TLI if you have non-freezable product, for example a liquid base product. TLI can help route that kind of freight by providing options with Protect From Freeze services, but these services require additional scheduling to ensure product is safely routed. Contact us today about your freezable product!
Less-than-Truckload
LTL Carriers continue to expand their capacities by purchasing equipment - including purchasing Yellow Corporation assets through auctions. In December, the first set of auctioned terminals were approved by a Delaware Court. XPO was the main buyer in the first round that included about half of Yellow Terminals.
TLI has noticed a slight up-tick in On-Time delivery across our LTL carrier partners. General on-time delivery has rose from 78.85% to 79.27% from October to November. This is still short of our target goal, but it's good to see the rise after the Yellow Bankruptcy left carriers with an influx of additional freight.
Truckload
While December is typically a slower month in freight, taking a look at the Year-Over-Year comparison of spot load posts and spot truck posts tells a compelling picture in the year of 2023. In December, Spot load posts were down 57.2% and truck posts were down 20.2% from the same time last year. Capacity freed up tremendously in last year as lower freight volumes were shipped and more carriers were readily available. The 20.2% decline in truck posts is most likely from the closures of trucking companies through out the year.
International Shipping
Maersk, the world's second-largest ocean carrier, announced on Tuesday an indefinite suspension of Red Sea transits. This decision comes after a container ship faced a missile attack by Houthi rebels last Saturday. As a result, the company will be rerouting its vessels around the Cape of Good Hope for the time being.
The White House warned that the duration of Houthi rebel attacks on commercial ships, leading to diversions from the Red Sea, could have a significant impact on increased shipping costs, potentially affecting the US economy.
“If we weren’t concerned, we wouldn’t have stood up an operation in the Red Sea, now consisting of more than 20 nations, to try to protect that commerce,” White House spokesman John Kirby said at a White House press conference on Wednesday, 1/3/2024.
Prior to Tuesday's announcement, Maersk had planned for 38 ships to travel through the Red Sea en route to Europe and the U.S. East Coast. Additionally, 25 ships had unspecified routes. These vessels are now anticipated to choose the longer route. By the end of the week, the Shanghai Containerized Freight Index (SCFI) saw a significant surge of 40%, hitting 1,760 points, marking its highest level since October 2022. Notably, the SCFI has more than doubled since October of that year.
Chart of the Month
TLI Insights
For the latest insights, tips and commentary surrounding the logistics industry, look no further. Shippers will find thoughts from the award-winning team at Translogistics covering everything related to your transportation processes and plans. If you have a question we are readily available at marketing@tli.email
Social Media:
Check out more Blog Posts from TLI:
