2024 Logistics Trends: 7 Factors Moving Supply Chains This Year
There’s never a quiet year in the North American supply chain.
Even when rates were as consistently low as we saw throughout 2023, there were still plenty of changes to analyze and developments to follow. Major providers left the industry, new capacity options emerged and seasonal freight patterns evolved in new and significant ways.
Heading into 2024, what logistics trends should you be tracking? And how will they impact your supply chain strategy?
Read on to find out.
7 Trends Driving Supply Chains in 2024
Logistics Trend #1: A Tightening Truckload Market
While rock-bottom truckload rates were the story of 2023, don’t expect that trend to continue in the coming year.
The most recent update to the Coyote Curve® spot rate index in our U.S. truckload market guide indicates that the rate of deflation for spot truckload rates has bottomed out and we’re on track to enter a Y/Y inflationary market by around the middle of 2024.
The truckload market is governed by the laws of supply and demand — when there is more carrier capacity in the market than there is shipper demand for transportation, rates stay low, and when demand outpaces the supply, they rise.
We’re coming to the end of a period of oversupply that will likely feature drivers and/or trucking companies leaving the market. As a result, the supply/demand balance will flip from what we saw in 2023 and rates will rise as capacity becomes harder to secure — this transition is known as the move from a “shipper’s market” to a “carrier’s market.”
What does this mean for you in practice? Well…
Want to know more about the dynamics that shape spot rates? Read our guide to understanding the U.S. truckload market.
Logistics Trend #2: Get Ready to Ship Spot Freight
You might notice in our Coyote Curve visualization that contract rates (which we track using the Cass Linehaul Index) tend to lag behind spot rates by a quarter or more. This means that in each market cycle, there comes a time when spot rates are on the rise and contract rates are still depressed.
In practical terms, you’re likely to see some routing guide deterioration as primary tender acceptance rates for your freight dip during this period, and you’re likely going to need to ship more spot freight as a result.
By midyear, the contracted rates that trucking companies agreed to at the end of 2023 will no longer be competitive with what they see on the spot market. Even your most reliable carriers will turn their attention more frequently to the spot market in order to earn what the market dictates their services are now worth.
Want to start your next spot shipment? Get a free and instant truckload or LTL quote now.
Logistics Trend #3: Shippers Relying More Heavily on 3PLs
In 2023, we conducted an original research study of more than 500 shippers to find out how they’re using third-party logistics providers (3PLs) in their supply chains.
We didn’t just ask them about their current operations ¬— we asked them about the future as well.
The results? 52% of shippers said they would increase their spend with 3PLs in the coming year, and 50% said they expect to increase the number of 3PLs in their network.
Outsourcing is the norm across the supply chain rather than the exception — 75% of shippers surveyed indicated that they outsource at least some of their operations to a third party.
If capacity becomes harder to source in 2024 as we expect, then you’ll probably see shippers turn more often to brokers to help them procure transportation as a result.
When should you look for a provider? Read our blog post on building in-house vs. outsourcing operations to find out.
Logistics Trend #4: Expect Service to Make a Comeback as a Leading Shipper KPI
In that same research study, we asked shippers to rank KPIs for us from most important to least important.
When we conducted this survey in a newly soft market at the beginning of 2023, shippers who had been burned by capacity limitations over the previous years were keen to prioritize service as the leading factor they used to differentiate 3PLs from one another — and they ranked cost last.
But as the market loosened, there was ample carrier capacity to meet freight demand.
And after three years of inflated shipping costs, coupled with higher interest rates and overall inflation, businesses used this opportunity aggressively pursue lower rates in their transportation network. And because they could take service for granted in a shipper's market, supply chain resiliency started to take a backseat to cost savings.
In 2024, with an inflationary market on the horizon, expect service to make a comeback. Even if service doesn’t suddenly become the most important factor for shippers in 2024, it will certainly become more important as capacity tightens across the board.
Is your business tracking the metrics that matter most to you? Find out how to choose and utilize logistics KPIs.
Logistics Trend #5: Cargo Security Is Top of Mind
One unfortunate trend that we see carrying over from 2023 into 2024 is a rise in cargo thefts.
Freight security watchdog CargoNet published data that showed Y/Y increases in cargo thefts reported to them throughout 2023, most recently a 101% increase from October-November 2022 to 2023.
Late last year, we published a primer on preventing cargo theft for shippers. It covers steps you can take to protect both the physical security of your cargo and the cybersecurity of the online accounts you use to work with carriers and 3PLs.
We suggest brushing up on these best practices in 2024, when we expect cargo thieves to be as committed and creative as ever.
And remember to only ship with providers who take your security seriously — preventing fraud and theft is a collective effort.
Want to learn more about specific steps we take to protect your freight? Fill out this form to talk to a shipping specialist.
Logistics Trend #6: Cross-Border Shipping on the Rise
Nearshoring is a trend that doesn’t show any signs of slowing down — in a 2023 McKinsey survey, 42% of supply chain leaders reported taking actions to nearshore their operations, three times the number who said the same in 2022.
Heading into 2024, we expect freight traffic to continue ramping up at both the Canadian and Mexican borders. The good news is that there are some new infrastructural developments supporting these growing volumes such as the Falcon Premium intermodal service linking rail transportation between Canada, the U.S. and Mexico.
Still, working with an experienced cross-border provider will be essential for keeping all your documentation in order, aligning all the carriers involved in these complex moves and avoiding delays at customs.
Want more international shipping expertise? Read our guides to Mexico and Canada cross-border freight.
Logistics Trend #7: Innovative AI-Powered Shipping Solutions
Technology is evolving as fast as ever, and the latest tech tools will continue to positively impact the way businesses ship freight this year.
Artificial intelligence (AI) continues to be a trending topic across all industries, and the supply chain is no exception. At Coyote, we’ve leveraged this technology to create My Smart Routes, a dynamic route optimization platform that keeps drivers loaded and moving towards their preferred weekly destination.
This tool not only enables guaranteed weekly revenue and improves the quality of life of enrolled drivers, it also has allowed us to create unique, cost-controlled capacity solutions for shippers in our network.
Expect similar innovations to continue changing the supply chain game in 2024.
Want to see My Smart Routes in action? Learn how it helped a global beverage shipper save money on drop trailer freight.
Want to Keep Up With the Latest Logistics Trends? Sign Up for Our Newsletter
Every month, we send out our latest content updates and event information to the shippers and carriers on our mailing list.
If you want to see how supply chain trends are shaping up throughout the year, there’s no better way to stay informed. Fill out the form below to sign up for our newsletter.