MercuryGate Logistics Landscape

Transportation Trends and Supply Chain News: What’s In & What’s Out in Q1 2023

Your logistics landscape is ever-changing. That’s why MercuryGate monitors the transportation trends and supply chain news affecting your service to customers and your ability to control costs. What’s in? What’s out? And how should you respond?

MercuryGate thought leaders shared insight and advice during our Logistics Landscape Founders Edition webinar. Watch it now! Hear Steve Blough, Pete Celestina, Don Mabry, and Bobby Darroll explain how autonomous logistics and visibility tools across MercuryGate’s technology platform support every stage of your freight shipment’s lifecycle. 

Watch our Logistics Landscape Founders’ webinar and you’ll also get perspective on the latest transportation industry news affecting your ability to control costs and serve your customers. 

Transportation Trends: What’s In?

Retail e-commerce sales for Q4 2022 are in, reflecting a decrease compared to Q3. Total U.S. retail sales were estimated at $1,785.8 billion, a decrease of 0.3% from Q3. Retail sales in Q4 2022 are up 5.7% compared to 2021. Meanwhile, Q4 e-commerce sales decreased 0.1% compared to Q3. E-commerce sales of $262.0 billion in Q4 were up 6.5% compared to 2021.

Supply chain operations continue to take a central focus for the world’s largest organizations – especially when it comes to last-mile efficiency. Target plans to invest $100 million to improve its U.S. sortation network. The move adds six sortation centers across North America and solidifies the retailer’s growing “stores-as-hubs” strategy for fulfilling online orders. 

Falling trucking rates allow shippers an opportunity to find new efficiencies in theIr supply chain networks. However, as freight volumes begin to rebound – especially in the LTL sector, there’s not much time to act. Will dynamic pricing finally gain LTL adoption?

Contraction continues for transportation rates, declining at a record rate during February, and narrowing the gap between spot and contract rates. Earlier in the year forecasters expected spot rates to bottom out in February-March.

DAT measures the moving average for spot rates in dry van, reefer, and flatbed hauls. Transport Dive tracks and reports those rates including week-to-week trends. For the week ending Feb. 18 the national average for dry van spot rates decreased about 2 cents to $1.72 per mile compared to the previous week. The average rate for reefer shipments declined 5 cents to $2 per mile. Flatbed rates increased 3 cents to $2.08 per mile.

Cargo thefts are still in, after surging 15% in the U.S. and Canada during 2022. All total, CargoNet recorded 1,778 supply chain risk incidents from voluntarily reported cargo thefts totaling more than $223 million in stolen goods.

Last-mile delivery is in for 1) big items – a fertile field for 3PLs, especially brokers with last-mile relationships; and 2) smaller payloads moved by drones. However, when unit delivery costs for drone shipments average $13.50, this method is not yet competitive with electric vehicles, internal combustion engine vehicles completing a single delivery, or any vehicle executing multiple deliveries on a single route.

Residential sales on new single-family homes hit a 10-month high in January, a seasonally adjusted 670,000. January sales were up 7.2% above December’s revised rate.

Sales of new single-family homes in January 2023 were at a seasonally adjusted annual rate of 670,000, a 19.4% decline compared to the January 2022 estimate of 831,000.

Tight labor market signs are emerging as late January jobless claims decline, and November’s jobs report reflected 10.5 million job openings. Meanwhile, data from the American Trucking Associations reflects that the driver shortage declined in 2022. As more for-hire drivers return to larger trucking firms, the driver shortage is easing.

At the same time, trailer orders are up significantly.

Transportation Trends: What's Out?

Supply chain headaches are out, according to some analysts, as retailers and manufacturers expect fewer disruptions and lower freight rates. “Freight congestion has cleared and ocean shipping costs have fallen close to pre-pandemic levels, the Wall Street Journal reports.

New orders for manufactured durable goods continued to decline in January. Down two of the past three months, durable good orders decreased $13 billion or 4.5 percent, the U.S. Census Bureau announced Feb. 27.


Durable goods – New Orders declined 4.5% in January to $272.3 billion Excluding transportation, new orders increased 0.7%. January’s decrease in new orders follows a December increase of 5.1% to $285.2 billion. Shipments of manufactured durable goods decreased 0.1% in January after 16 consecutive monthly increases. Shipments of transportation equipment in January declined $1.6 billion or 1.7%.

Declining oil and gas prices create temporary relief for diesel cost pressure. As of the Feb. 27 report, the average on-highway diesel fuel price declined in the U.S. for the third consecutive week after reaching $6.604 the week of Jan. 23.

The U.S. average price for on-highway diesel fuel decreased 1.2 cents to $4.282 in the March 6 report from the U.S. Energy Information Administration. The average is 5.6 cents lower than the same period last year. Similarly, average prices decreased across most U.S. regions, with the largest weekly decrease in New England. There, prices dropped to $4.736, a decrease of 8.9 cents from the prior week. The Gulf Coast region posted no week-to-week change, holding steady at $4.027 per gallon. The on-highway diesel average in the Midwest increased 1.1 cents in the March 6 report. Fuel prices are the highest in the West Coast region at $4.895 per gallon, a decrease of 3.8 cents compared to the prior week. According to EIA, on-highway diesel costs are the highest in California ($5.316) where prices declined 4.1 cents since the Feb. 27 report from EIA. 

Consumer spending decreased $41.6 billion in December 2022, in spite of gains in personal income and disposable personal income.

The decrease in consumer demand is reflected elsewhere across economic indicators. Demand and output for cardboard boxes dropped sharply in Q4 2022. According to the Fibre Box Association, production of U.S. box shipments fell by 8.4% during the period. Box operating rates fell to 80.9%. Likewise, supply for containerboard remains at historically high levels.

December’s decline in consumer demand drives down demand across the trucking marketplace and ocean transportation, despite container lines’ capacity control efforts, including the planned break-up of the 2M Alliance of MSC and Maersk. In the same vein, demand continues to wane at West Coast ports. Stalled labor talks are sending more cargo toward alternate locations along the East Coast and Gulf Coast.

Class 8 truck orders in North America are out – at least during December when they fell to 28,300.

News that all-electric domestic trucking fleets would consume 40% of the electricity generated in the U.S. tempered hopes for a wired solution to transportation. According to research from the American Transportation Research Institute, charging stations would require a $35 billion investment.

Factory jobs are out as signs of a tight labor market are emerging in the manufacturing sector. Manufacturers are struggling to fill more than 740,000 open jobs, a number that could rise to 2.1 million open positions by 2030.

New orders for manufactured goods in 2022, seasonally adjusted and reflected in month-over-month percentage gain. Orders increased 1.8% in December after a 1.9% decline in November.

More Economic Indicators to Monitor

U.S. total business end-of-month inventories for November 2022 were $2,476.5 billion, a gain of 0.4% over the prior month. U.S. total business sales were $1,838.2 billion, down 0.8% from the preceding month.

Privately owned housing starts in December 2022 were down 1.4% from November 2022 to a seasonally adjusted rate of 1,382,000. At the same time, the sale of new single-family houses in December increased 2.3% over November to 616,000.

Load-to-truck ratios increased slightly for most equipment types during the week ending Jan. 28, according to DAT. Reefer increased from 3 to 3.2 loads per truck. Flatbed increased from 11.2 to 11.4 loads per truck. Dry van decreased from 2.4 loads per truck to 2.2 loads.

What Else Deserves Your Attention?

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