2024 Outlook on the Trucking Industry
Last year, we explored some of the most talked-about trucking trends of 2023, discussing the year's biggest challenges and predictions scrutinized by economic analysts and industry experts. Now, with the year behind us, we've seen some of these predictions come true, including reduced freight demand, constant battles against rising inflation, and uncertain conditions with the supply chain.
However, not all things were doom and gloom in 2023. Consumer spending for Americans kept up (particularly online), enhancements in technology helped create efficiencies for logistics and operational costs, and electric vehicles (EVs) put a revolutionary focus on developing sustainable business practices for fleets everywhere.
So, what can truckers, fleet owners, managers, and others in the trucking industry look forward to heading into 2024? We highlight some of the biggest trends to keep an eye out for heading into the new year.
Trucking Trends for 2024
1. Watchful Eyes Remain on the Trucking Economy
2023 saw the truck and transportation industry experience some of the most wild volatility to date. Still reeling from the pandemic, demand for freight and transporting goods continued to decrease. This meant truckers and companies like Yellow Corporation and Convoy found themselves filing for bankruptcy or shutting down entirely. The bleakness of the "freight recession" has made analysts hesitant on whether or not relief will be on its way.
However, some glimmers of hope from this past year indicate chances of a potential market rebound, particularly in the second half of 2024. As retailers continue stabilizing their inventory levels, stocking up on in-demand products, consumer confidence keeps increasing. This lead to a slight increase in freight demand amidst one of the worst slumps of the industry. Additionally, inbound cargo volumes have steadily risen after dropping significantly throughout late-2022 and early-2023, as shown in the graph below from the National Retail Federation:
Now, all eyes are poised on 2024 to see if the anticipated freight market rebound becomes a reality. Continued stabilization of retailer inventory levels and imported goods remain key to the success of any sort of industry rebound.
2. Increased E-Commerce Spending Requires Higher Delivery Optimizations
Consumer spending remained high, particularly for online shopping. Around 70% of Americans shopped online in 2022, contributing to nearly $905 billion in total e-commerce sales. With even more consumers shopping online in 2023 (and beyond), expectations for speedy deliveries has risen significantly. And delivery companies have taken this expectation very seriously.
Other reasons for the demand in shorter transit times stem from advancements in logistical and transportation technology. Trucking companies will continue being pushed into using methods like route optimization and delivery consolidation in order to adapt and remain competitive in the transportation industry.
This push for shorter delivery times requires companies to also invest in costlier last-mile delivery options. As shorter transit expectations continues to grow, so will the last-mile delivery and same-day delivery markets, with the latter's market size expected to grow by 21.2% in 2024. Most companies have already invested in these capabilities such as enclosed vans for LTL freight. By continuing to invest, companies can stay ahead of the curve and meet customer delivery demands head-on.
- Shop Enclosed Van Trailer products today!
3. Supply Chain Resilience and New Fleet Strategies
The supply chain slowly eased in 2023, bringing back soft confidence to fleet owners and truck drivers on getting parts, inventory, and imports delivered to their recipients in a timely manner. However, experts agree that disruptions are still likely to occur in 2024, as we continue to see the stabilization of the supply chain.
While companies hold out against supply chain disruptions, experts are encouraging fleets to start re-strategizing their efforts in order to withstand potential fallback like delivery failure. Most of these strategic efforts involve investing in telematics, predictive analytics and other high-tech methods to analyze logistical data and enable the fleets to make data-driven decisions. Predictive analytics can also be useful in developing contingency plans in the event emergencies or other unplanned instances occur.
Lastly, another consideration involves diversifying the number of suppliers to ensure a constant flow of transported goods and prevent instances of supply chain reverberations from affecting a fleet's business. Owners and managers will need to come up with new and creative strategies to stay afloat.
4. Focus on Cybersecurity for Fleet Technology
Fleet managers continue integrating technology into their work. Such technologies include artificial intelligence (AI), Internet of Things (IoT), and the emergence of mobility-as-a-service (MaaS), for better operations. With more technology used, trucking companies become increasingly vulnerable to cyberattacks and potential hackers. In fact, the trucking industry reported a 400% increase in automotive cyber attacks between 2017 and 2022.
The need for cybersecurity has never been more important for the trucking industry. Companies need to invest in these programs to protect and secure sensitive company and customer data from these potential hackers. Installing security measures on hardware, using visibility technology to track truckers in real-time, and fortifying GPS programs that prevent hackers from scrambling destination coordinates are just a few examples.
5. Continued Rise of Electrification and Sustainable Practices
Lastly, the trucking industry continues to see the push for EVs and sustainable practices heading into 2024. As more EVs and hybrid vehicles are expected to sell this year - and estimated 16.7 million, or 24% of the total vehicle share, according to NASDAQ - trucking companies will likely start planning to invest in these capabilities, if they haven't already. In fact, 2023 saw a significant boom in the number of medium- and heavy-duty battery electric vehicles deployed, with 10,265 vehicles hitting the road, as shown below:
Graph from Environmental Defense Fund.
EVs and other autonomous modes of delivery are likely to rise in 2024 as part of a promise from many trucking companies to adopt green initiatives and embrace fleet decarbonization. Many of these initiatives include switching to alternative fuel options, recycling old vehicles and parts, and investing in eco-friendly technologies for long-term savings. With a majority of fleet companies believing in the likelihood of reducing emissions to 0%, these practices take trucking companies one step closer toward a carbon-free future.
Looking Forward in 2024
The outlook on 2024 shows another slow but steady turnaround year for the trucking and transportation industry. With supply and freight demand leveling out, delivery expectations rapidly changing, and advancements in shipping technology, truckers are being propelled into a new sense of normalcy like they've never seen before. Companies must embrace these changes and stay ahead of the curve as they continue down this path into the future.
