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The 2024 Freight Market at a Glance

04 Mar 2024
Category: Market insights
Author: David Vidri
Shape

The freight market appears to be finding some balance after nearly 24 months of deflationary conditions. As with any market shift, that means change is on the horizon for shippers and carriers, so now is the time to prepare your business for what’s to come in 2024 and beyond. 

To help you stay ahead of the curve, Arrive’s Market Intelligence team recently released its 2024 Truckload Freight Rates Forecast, which dives deep into rates, demand, and other key trends that will shape the market this year. Read on to get the key takeaways, and check out the full forecast for more expert analysis and insights

Rates Are Ready to Move 

The 2024 rate environment will be defined by flat to slow demand growth and continued capacity exits, and industry experts are forecasting a fairly broad range of rate outcomes. Transportation Insights and several others project upwards of 30%-40% growth, whereas ACT Research expects around 20% and FTR just over 10%. 

Though anything is possible in today’s volatile freight market, we believe a more moderate trajectory is the most likely scenario, with the maximum rate growth reaching around +14% by the end of Q4 2024. 

We expect the spot rate floor to increase throughout the year, resetting higher as the market moves through periods of seasonal volatility. Contract rates will continue to normalize but slower than in 2023 and should ultimately find a floor sometime in Q2 or Q3. 

As the spot-contract gap closes, the market will become more vulnerable to disruption. However, any significant and sustained upending will likely require a black swan event or other such catalyst, so precisely when the next major inflationary shift will occur is anybody’s guess. 

Key Demand Drivers

Several factors will drive demand in 2024, including goods consumption levels, inventory cycle resets, industrial recovery, infrastructure development, and nearshoring. Increased freight demand will almost certainly follow if growth occurs in all or even some of these areas. For example, inventory and industrial production cycles are showing signs of bottoming out, which should have a flat to positive impact on truckload demand.

On the consumer side, persistent inflation and elevated interest rates were major market headwinds in 2023. As long as inflation continues to slow and the job market remains healthy in 2024, we expect consumer optimism to drive strong spending and, in turn, freight demand. 

The Capacity Correction Continues

Of course, diminishing supply must accompany increasing demand for the market to see a sustained inflationary cycle.

The current capacity correction has been underway for some time but is unfolding much slower than in previous cycles. However, with spot rates still below the public carrier break-even cost per mile, the current rate environment is unsustainable, and carriers will continue to close up shop. 

Today, the number of drivers on the road is already down 18% from the peak, indicating that the market is moving toward equilibrium and thus becoming more vulnerable to disruption. That vulnerability is being exacerbated by shippers locking in long-term contract pricing while rates are low, which will likely impact their routing guide compliance and drive up spot market rates if demand increases as expected later in the year. 

Finally, it’s worth noting that driver capacity remains slightly above pre-pandemic levels, suggesting that the industry is not just returning to its former state but evolving to meet new demands and challenges.

Plan Today, Win Tomorrow

There is still a fair amount of uncertainty around how 2024 will unfold, so staying on top of evolving trends will be critical. Remember to read the 2024 Truckload Freight Rates Forecast for more expert analysis and insights on the road ahead, and keep up with the latest news by getting the Arrive Market Update delivered directly to your inbox every month.


Tim Denoyer,
VP and Senior Analyst at ACT Research

As VP and Senior Analyst at ACT Research, Tim analyzes commercial vehicle demand and alternative powertrain development (i.e. electrification), and authors the ACT Freight Forecast, U.S. Rate and Volume Outlook. He previously spent fifteen years in equity research focused primarily on the transportation, machinery, and automotive industries, and co-founded leading equity research firm Wolfe Research.

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Scott Sandager,
Chief Administrative Officer 

Scott Sandager is the Chief Administrative Officer at Arrive Logistics. He joined Arrive in 2018, bringing over 14 years of logistics and brokerage experience, with expertise in project and change management, organizational design, talent development and customer satisfaction. Scott previously held many diverse roles of increasing responsibility with AFN, a Chicago-based freight brokerage.

Barry Conlon,
CEO & Founder at Overhaul

Barry Conlon is the CEO and founder of Overhaul, the global leader in active supply chain risk management and intelligence. With a remarkable career spanning over 30 years in supply chain security, he is widely regarded as a trailblazer in modern-day supply chain security standards and best practices.

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Eric Dunigan is the President of Arrive Logistics. He began his career at Command Transportation before co-founding Arrive with Matt Pyatt in 2014. As president, he is responsible for driving revenue and growth, as well as leading the Strategic Partnerships team — a veteran group of supply chain experts who work with Arrive’s customers to reimagine their shipping strategy.

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David Spencer,
VP of Market Intelligence

David Spencer is the Vice President of Market Intelligence at Arrive Logistics. David joined Arrive in 2017 after spending six years at AFN focused on business intelligence. His department provides critical market data and expert analysis to internal teams and publishes monthly market updates for shippers and carriers under the Arrive Insights banner.

Andrew Clarke, Board Chair,
Arrive Logistics and Global Critical Logistics

Andrew Clarke is Board Chairman for Global Critical and DCLI, Inc., and a board member for Arrive Logistics and Element Fleet Management Corp. His 20 years of global transportation and logistics experience include time as CFO of C.H. Robinson, CEO of Panther Expedited Services, Inc. and SVP and CFO roles at Forward Air Corporation.

Dean Croke,
Principal Analyst
at DAT Freight and Analytics

Dean Croke is a Market Analyst at DAT Solutions, where he focuses on freight market intelligence and data analytics. His 35 years of experience with data analytics, transportation, supply chain management, mining and insurance risk management include time as co-founder of FleetRisk Advisors and in a number of other high-level roles with FreightWaves, Spireon, Lancer Insurance, Omnitracs Analytics (formerly Qualcomm) and more.

Asanka Jayasuriya,
CTO and Partner at 8VC

Asanka Jayasuriya is the CTO at 8VC. He is an accomplished engineering and product leader with 20+ years of experience in the cloud. He has a strong background in enterprise SaaS, PLG products, infrastructure, and security. Notably, he served as CTO and SVP of Engineering at SailPoint, leading their successful transition to the cloud and successful exit event. He also held senior leadership roles at InVision, Atlassian, and Amazon, driving growth, operational excellence, and innovation. At 8VC, Asanka works with the entrepreneurs and leaders in our portfolio as a virtual CTO supporting their growth.

Chad Eichelberger,
President at Reliance Partners

Chad Eichelberger is the President of Reliance Partners. Since 2015, he’s leveraged his extensive experience in risk management, compliance, best practices and contracts to lead the company’s logistics and truck insurance strategy and operations. Chad was previously the President of Access America Transport, where he led the company from $8M to over $600M in revenue.

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