2024 Trucking Year in Review, Predictions for Shipping in 2025

Reflecting on 2024, the prolonged truckload recession stands out as a key event. But, limited warehouse space, increased tariffs and more will remain key factors impacting supply chains in 2025.

Valentin Valkov Adobe Stock 1092452483
ValentinValkov AdobeStock_1092452483

A look back at 2024 involves trends, disruptions and innovations. Here’s a year in review:

2024 year in review

Shippers prioritized short-term cost reductions by leveraging the abundant and inexpensive truckload capacity, which constrained growth in the contract dedicated sector. With a stable driver supply and recent experiences of pandemic-related capacity shortages, supply chain executives also increased investments in private fleets.

An anticipated disruption that didn’t materialize as expected was the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) port strike. Initially feared to be a prolonged disruption, the strike lasted only three days and had minimal impact on the supply chain. However, the ILA and USMX are set to negotiate a new contract by Jan. 15, and failure to reach an agreement could result in another strike.

Reflecting on 2024, the prolonged truckload recession stands out as a key event. Most industry leaders had predicted a mid-year recovery, expecting market conditions to improve in the latter half of the year. Instead, across most modes, the freight market remained characterized by excess capacity relative to demand. Additionally, the industry experienced a significant warehousing supply-demand imbalance, as the years following the pandemic saw a surge in new warehouse developments.

2025 predictions

Three things to keep an eye out for next year are:

  • Tightening of warehouse space. Warehouse space is expected to tighten due to a slowdown in new construction following an oversupply build-up after the pandemic, combined with increased regional warehouse demand driven by shifting manufacturing locations as a result of nearshoring, tariff uncertainties prompting stockpiling, and economic growth fueling higher storage needs.
  • Increased pricing for domestic transportation. Multiple false predictions of market improvements (2023-2024) have many non-logistics executives thinking today’s pricing is the new norm because it is still above pre-COVID-19 levels. When factoring in inflation, prices are near Great Recession levels and have nowhere to go but up. Many non-logistics executives will be in for a rude awakening.
  • Trade and tariffs. Opportunities abound with anticipated changes in trade policy, as incentives for domestic production and near-shoring are likely to accelerate. This means a potential surge in demand for regional warehousing, LTL and dedicated services as more businesses bring production closer to home. 

 What will the state of the industry look like?

  • Government investment in transportation infrastructure has the potential to elevate the entire logistics industry. Infrastructure improvements, from road expansions to upgraded ports, could mean smoother transit, shorter delivery times and reduced wear on our fleet.
  • A business-friendly regulatory approach will streamline compliance requirements and reduce operational costs. 
  • The brokerage industry will retract with bankruptcies and consolidations
  • The truckload market is poised to experience its first non-catalyst driven improvement cycle in recent memory, and it will be a MAJOR learning curve if we spend a long time in equilibrium. Most employees at brokers, shippers and carriers have only experienced rapid booms and bust cycle over the last decade. 

Some things to watch out for in the less-than-truckload (LTL) space:

  • Higher demand for precision delivery as companies manage tighter inventories. 
  • Any uptick in the economy will begin pressuring truckload (TL) capacity and amplifying the LTL supply-demand ratio supporting price increases from LTL carriers. 
  • As TL recovers, heavier weighed LTL shipments will likely begin to migrate from the truckload sector back to the LTL sector.  
  • An unknown at this juncture will be the freight classification related impacts that will be introduced by the anticipated National Motor Freight Classification (NMFC) changes. 

Some things to watch out for in the dedicated space:

  • A return to traditional demand for third-party logistics (3PL) providers and the TL market finally swings and shippers move from cost control to securing reliable driver resources. 
  • Increase in RFPs and potential shifting of carriers as a result of post-COVID-19 contract expirations, and shippers focusing on service vs. simply capacity. 
  • Potential for specialized equipment needs as manufacturing reshores. 

When it comes to working with partners and anticipating possible disruptions:

  • Customers are looking for unique solutions, stable relationships and human interaction. In the brokerage world, personnel cuts have been deep, causing communication to suffer or be replaced by automation. Customers are looking for consistent relationships. 
  • Today, shippers increasingly seek consistent quality service that allows the shipper to be cost and service competitive in its marketplace while providing well-managed carriers the resources to reinvest in its people and capital-intensive business. 

 

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