By Joseph McDevitt

Category: News

Take Action Now: Insights on 2024 Freight Markets

Freight Markets

Since the beginning of this year, Translogistic’s (TLI) weekly messages have been highlighting the dynamics in the small parcel, LTL, and truckload markets and how the factors in each one of these market segments could impact your 2024 freight budgets.

It’s not too surprising that shippers who have taken advantage of the Get Started options and scheduled a one-on-one conversation to learn more about what shippers should expect to see for the remainder of 2024 have reached out to us. Here’s a quick summary of the three key items that should be on every shipper’s radar screen.

Freight Markets

Freight Market: Truckload

First, the truckload market $/mile (cost per mile) has bottomed out, according to the general consensus. Carriers like Knight-Swift, J.B. Hunt, and Werner are committing more capacity to the spot market until the contract market rebounds. They’re not locking in capacity at contract prices at current levels that do not deliver reasonable profits.

What does this mean to you? If you’re considering conducting a TL sourcing event, our advice is: GET MOVING! With any economic rebound anticipated, truckload rates are likely to skyrocket heading into 2025. Our recommendation is simple: if you plan on conducting a truckload bid in 2024, you should be in the market within the next 60-75 days. Anticipate the change, do not be surprised by it. Partner with a managed transportation expert like TLI to source the best pricing and capacity for your supply chain. If you don’t have time to prepare or resources to conduct a sourcing event in this timeframe, get in touch with TLI. We offer the greatest Transportation RFP in the market, we build the best carrier sourcing events and have an actual rating engine to run scenario planning to ensure you actually are securing the best pricing.

Freight Market: Small Parcel

Second, expect further substantial increases in small parcel rates beyond those at the first of the year. FedEx and UPS have made pricing into a science and are looking for new ways to increase revenue such as including distance traveled, weight, and extra services in pricing. With UPS announcing their intention to cut costs by $3 billion and protect profitability following their new contract with the Teamsters, don’t be too surprised if your service levels are affected and you notice changes in accessorial charges. Are you prepared for your parcel rates to rise by as much as 10%?

Let TLI know if you’d like to learn more about the things you can and should be doing to manage your parcel spend, low hanging fruit is checking the pricing readily available in our TMS system, or use your own parcel contracts but use mode optimization comparisons. TLI has had small parcel adoption features where users can use the Transportation Management System to also mode optimize and compare their LTL directly against their parcel pricing. Ensure you give it a try right away.

Small Parcel and LTL Freight Rates

Freight Market: Less-than-Truckload

Third, know that the LTL carriers have elevated their pricing game when it comes to collecting data. In many cases, they know more about your shipment characteristics than you do and they are pricing accordingly. TLI are absolute experts at building shipper profiles, and we have the rating engine to actually compare the tariffs. Just because it is a 99% discount does not make the pricing good if the base rate is sky-high. Likewise, TLI can customize cargo liability, accessorials etc based off what you actually route. We can run density studies and ensure you are using the correct NMFC number as well. If your sourcing events haven’t adapted over time, stop, learn, and adjust before moving forward.

As we have shared with savvy shippers who have contacted TLI: when you apply supply chain analytics in your sourcing principles in negotiations with your LTL carriers, you will get better results. TLI sources LTL pricing individuated off your shipper profile: cargo liability, density, freight class, lane makeup, and commodity. Translogistics loves to share with you what the carriers are looking for these days. Our experts will provide you with the data you can use in your LTL sourcing event.

Freight Markets

The timing is right to take action in all three markets and set your strategy to adjust to changing conditions. TLI are experts in all aspects of transportation rate sourcing and have the processes, tools, and resources to help you. Our freight brokerage process provides you with the best possible results that are difficult for you to obtain on your own.

How can you get in touch? Contact TLI today!