That’s a Wrap! 2024 Logistics in Review

It’s been another eventful year in shipping, but how your supply chain has fared depends on your industry and the modes your logistics operation relies on most. Overall, the market has been challenging for carriers due to low freight volumes. Meanwhile, it’s been a buyer’s market for many shippers thanks to the availability of plenty of capacity.

If the challenges of 2024 taught us anything, it reaffirmed a core lesson of COVID that logistics is global. What’s happening in other parts of the country and world can have a local impact, and all shippers need to create resilience in their supply chains.

A promising sign is that in 2025 the market is expected to reach equilibrium. Rates firmed up over the later part of the year (again, depending on the mode and your lanes), so shippers need to be on the lookout for unexpected shipping cost increases that may come about.

Regardless of where things are expected to be heading, looking back at the past twelve months can provide some useful insights and lessons for the future. Here are the most impactful events and other market dynamics from 2024.

The Economy:

The volume of freight shipped has been sluggish for a few years. But there are signs the market is ready for a turnaround. According to ACT Research, “…the pace of freight growth has moderated, impacted by slower consumer spending, inventory adjustments, and persistent overcapacity. While truckload spot rates have seen some recovery since Q3, capacity rebalancing challenges continue to limit significant rate gains.”

Some tightening of the freight market occurred early in 2024 as carriers exited and the market worked to recover from years of post-pandemic overcapacity. The lack of freight volumes, however, prevented rates from rising significantly.

Of note is that e-commerce continues to be the big driver of volume growth in the shipping marketplace. Like with air freight and parcel shipping, it may offer the best opportunity for growth to truckload and LTL carriers and warehouses.

Weather:

It was a difficult hurricane season for Florida, South Carolina, and Louisiana, and as is often the case, the impact was felt in many other parts of the country. How serious did things get? If you do not live in the areas directly in the storms’ paths, there is a Waffle House Index (recognized by FEMA) you can look at to understand just how impactful a storm has been.

Weather much further from home can matter to U.S. freight markets, too. A drought in Panama has affected the flow of goods through the canal for over a year. And although the impact eased later in 2024, the restrictions caused delays moving freight from Asia to the East and Gulf Coasts of the U.S. which added to the problems that these ports are already facing. This leads us to our next top story — Labor. 

Labor:

Integral to most supply chains in the U.S. are the goods that are imported by ocean freight. A large part of that flow stopped at the beginning of October when a much-anticipated port strike at U.S. East and Gulf Coast ports began and lasted for three days. The stoppage ended once the sides agreed to a cooling-off period and to suspend the strike until January 15, 2025, to give time for the sides to come to a long-term agreement. This story needs to be watched closely, as another strike could last much longer, and the impacts felt more deeply by shippers.

Short-lived work disruptions during 2024 at Canadian ports and railroads have also created small headaches and nervousness for North American supply chain managers. All these labor issues are good reminders of how connected supply chains are and how important contingency planning can be when the normal movement of goods is disrupted — no matter how far upstream.

Technology:

Loadsmart is on the cutting edge of technology. And the leading logistics tech story of 2024 is AI, which continues to impact supply chains in tangible ways. Logistics AI tools like FreightIntel AI can be an effective decision support tool in any shipping operation. The presence of technology will only continue to increase and should be part of all shippers’ plans to create greater supply chain efficiency.

However, technology does increase risks and points of exposure for unprepared supply chains. Cyber-attacks and threats from ransomware continue to affect logistics providers. Although not an attack, other disruptions can be caused by technology. You’ll recall the CrowdStrike shutdown from summer 2024 as an example of how a problem with technology can affect any operation. Partnering with technology providers that have undergone rigorous security testing and are SOC 2 Type II certified can add another layer of protection when facing these challenges.

Geopolitics:

The impact of geopolitics is being felt in global and regional supply chains more than ever. The supply chain industry saw a trend of moving towards reshoring/nearshoring with the start of the Ukraine/Russia conflict, and the conflict continues to impact supply chains everywhere. The problems created by the Red Sea attacks have driven up shipping costs in many trade lanes and extended transit times all over the world. Neither situation, unfortunately, appears to be near resolution and needs to be part of affected companies planning for 2025.

If implemented, the promise of many new tariffs will do a lot to shape sourcing practices with potentially big impacts on costs and could create large shifts in supply chains. This is a story that will come into much clearer focus over the next few months.

Preparing for 2025

As we mentioned in the opening, there are lessons to be taken from the top logistics stories in 2024. Most of them illustrate the value of creating preparedness and resilience in your supply chain. Impactful disruptions are usually not easily preventable (such as the port strike or Red Sea attacks) and illustrate how connected the world’s supply chain is.

Prepared companies constantly look for ways to create flexibility in their supply chain. This can include leveraging technology to support decision-making and emphasizing stronger and more diverse supplier partnerships. Shippers should be prepared for 2025 to be as eventful as 2024. That’s just how supply chains work!

Ready to kickstart 2025? Contact us at Loadsmart to see how we can help make this your best logistics year yet!