12/26/2023

2024 Transportation Outlook: What Shippers and Carriers Need to Know

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A guest blog by Chris Duncan, SVP of Transportation

Heading into 2024, the transportation industry faces persistent challenges like those experienced this past year — suppressed spot and contracted rates, financial pressures on small and mid-size fleets, and ongoing driver shortages. While demand is expected to improve from current softness, other factors will test providers. Agility, efficiency, and collaboration will differentiate those able to deliver value through changing times.

In 2024, there will be a notable emphasis on shippers attempting to recoup the rate hikes implemented during 2021-2022. These hikes were initially put in place to accommodate increased driver wages but are now impacting carriers’ bottom lines. Since driver wages make up the largest portion of expenses, maintaining these wages will be essential to keeping the industry cohesive. Carriers will focus on boosting asset utilization by optimizing delivery hours, increasing backhauls, and reducing empty miles. An emphasis on route efficiency technology and data analytics will aid these efforts. Higher costs for fleet maintenance, tires, insurance, and other items will also squeeze margins, especially for small to mid-sized carriers.

On the driver front, some market easing of shortages could occur as smaller carriers succumb to the financial pressures. But quality over-the-road drivers remain scarce, as they gravitate toward dedicated routes and more predictable work. Carriers incorporating technology for efficiency and safety will attract talent best.

Equipment shortages are also still looming in 2024. Backlogs for specialty gear combined with aged fleets will create ongoing customer difficulties. Carriers adding specialty services that are capable of converting private fleets offer solutions for shippers that cannot bear the load. 

Within dedicated carriage, procurement teams are targeting recouped costs. Protecting driver pay requires asset productivity gains that include flexible delivery times, optimized networks, and integrated services. Carriers that are diversified across supply chain segments can provide unique value, as they can focus on building stronger, more integrated relationships and tailor service offerings to customer needs.

Amidst upcoming 2024 challenges, agility and collaboration are essential. Contingency planning for labor unrest and other disruptions will help ensure continuity, and seeking partnerships with larger, more diversified carriers provides options for weathering volatility. Above all, both shippers and carriers must take a long-term partnership approach focused on mutual value creation.

Chris Duncan, SVP of Transportation

As a Senior Vice President, Chris Duncan leads the commercial efforts for NFI’s Dedicated Contract Carriage, Network Transportation, and Mexico cross-border service offerings. With extensive experience in developing creative solutions solutions and talent development, Chris effectively turns current challenges into future advantages. His expertise and NFI’s comprehensive services deliver lasting value, scale, and strong partnerships.