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
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.
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.
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.
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.