Logistics Industry Trends to Monitor in Q4 2022

Q4 2022 Logistics Landscape

The transportation industry has seen immense change as it faces shifting markets and various challenges. It’s helpful to look at the latest logistics industry trends to understand how things are going each quarter. As we move into Q4, let’s take a look at some of the trends and patterns in the logistics landscape.

Logistics Industry Trends by Mode

The U.S. ocean freight market still has issues we’re likely to continue to see as we move into Q4. U.S. East Coast Ports show problems like vessel congestion, irregular schedules, and port omissions in Charleston and Savannah. U.S. West Coast Ports offer the open capacity for LA and fluid capacity for Oakland and Seattle, while Houston has had limited capacity. Also, IPI shipping faces a lack of containers and chassis. There are backlogs and wait times across the country, with some spots worse than others. Overall, booking weeks in advance to plan for issues will be helpful.
For U.S. airfreight, airport pace is average, capacity is broadening, and rates are stable.
Trucking and intermodal transport are experiencing chassis shortages. Carriers have more capacity for loads as tender rejections went down 70% YoY, spot rates went up, and there is more of a desire for long-term, fixed-rate contracts. Fuel rates continue to go down from the summer peak, and load-to-truck ratios are down but leveling.
LTL shipping has seen record drops in the Fred Producer Price Index, dropping 17.24 from June to July and 19.54 from July to August. Nonetheless, this may help balance record years of rapid growth. LTL carriers are still showing substantial revenue increases.

More Logistics Industry Trends Worth Noticing

Rail and port negotiations are going well, with a strike averted that would have stopped 30% of the nation’s shipping capacity and caused more problems to the supply chain. With a tentative agreement reached, White House Supply Chain Envoy Stephen Lyons is confident it will be ratified. Some unions are already agreeing to the terms.

During this upcoming quarter, we’ll be paying attention to the California Air Resources Board’s October vote on the truck proposal to make medium- and heavy-duty trucks going into railyards and ports zero emission by 2035 and a ban on diesel big rig sales by 2040.

After years of change in the trucking market, there is an expected return to a more normal environment. Vice president for trucking of research firm FTR Avery Vise said, “The truckload market is easing back to normal levels of growth. I expect spot rates to keep declining. Contract rates will start easing after the fourth quarter. We don’t see a lot of risks.”

Even though global supply chains eased, August saw a rise in U.S. consumer prices and underlying inflation. Gas prices went down, but there were increases in rent, food, healthcare, and utilities.

Globally, we need to pay attention to unrest within freight labor and its effects on supply chains. Some recent examples include a two-week dockworker strike at the Liverpool port in the U.K., contract talks with dockworkers on the West Coast of the U.S., and a week-long period when truck drivers stopped working in South Korea. These trends may predict similar struggles going forward. President of the union AFL-CIO Liz Shuler said freight and supply chain workers are “tired of being called essential and treated as expendable. I do think this is emblematic of what we have seen and what we are going to continue to see.”

We are entering peak season within Q4, but it looks different than the previous two years. This year’s peak season expects a daily capacity surplus of 18 million parcels. This outlook differs from the past two years when demand significantly exceeded capacity. This year’s flat demand is accounted for by factors like more in-store shopping, direct-to-store shipments, and inflation impacting goods purchases.

As supply chains catch up and return to previous levels, we see an abundance of empty containers in U.S. ports. The prediction is that North America will have 4.3 million TEU of excess containers by early 2023.

These are a few more areas to follow:

  • Fuel prices stabilizing
  • Truck tonnage
  • Load-to-truck ratios
  • Spot linehaul rates
  • E-commerce growth

On-Highway Diesel Fuel Prices

U.S. average on-highway diesel prices declined and stabilized during September, down from a peak of $5.81 in the U.S. Energy Information Administration fuel report for June 20. The Oct. 3 average reached a low of $4.836 before news of OPEC+ announced plans to reduce oil production.

Truckload Linehaul Index

Truckload linehaul index from Cass Information Systems decreased to 159.7 in August from 162.7 in July.

Load-to-truck ratios

Load-to-truck ratios reported by Transport Dive according to DAT Freight & Analytics

Spot linehaul rates

Spot linehaul rates began an uptick in early October after sustained declines across dry van, flatbed, and reefer. The national average on Oct. 1, according to DAT Freight & Analytics, for dry van was $1.85 per mile; for flatbed was $2.17 per mile; and for reefer was $2.15 per mile.

E-commerce Growth

U.S. retail e-commerce sales for the second quarter of 2022 was $257.3 billion, an increase of 2.7% from the first quarter of 2022. E-commerce sales in Q2 2022 accounted for 14.5% of total retail sales in the U.S., according to the U.S. Department of Commerce.

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Learn More About Industry Trends, Keep up with Demand

Stay updated with the latest supply chain headlines that deserve your attention in Q4. Visit our Logistics Landscape report for regular updates about transportation industry trends affecting your cost to serve.

To keep pace with current freight market demands, tap into digital freight matching through MercuryGate TMS. Download our eBook, The State of Digital Freight Networks, to get started today.

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