Industry Market Trends

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

Current Market:

• Agricultural and Seasonal Trends: The Midwest is seeing a surge in freight demand due to ongoing agricultural shipments of corn, soybeans, and other seasonal produce, leading to tighter capacity and higher spot rates for Reefer and Dry Van equipment. Recent reports from June and July 2024 highlight record yields and increased export demands.
• Back-to-School Freight Demand: The back-to-school season is driving increased demand for Dry Van equipment to transport educational supplies and apparel, adding to the existing capacity strain. Retailers are reporting higher-than-expected inventories due to early school year preparations.
• Construction Projects: High demand for Flatbed equipment in Texas and California due to significant construction projects, including highway expansions, new commercial developments, and residential projects. Recent data indicates a 15% increase in construction permits issued in these regions compared to the same period last year.
• Port Operations: Recent improvements at West Coast ports, including Los Angeles and Long Beach, have reduced congestion. However, East Coast ports, particularly in the Southeast, are now experiencing increased volumes and delays due to rerouted shipments from Asia. Reports from July 2024 indicate a 25% increase in container volumes at the Port of Savannah.

Market Predictions:

• Continued Tight Capacity: We anticipate tight capacity in the Midwest and Southeast through August due to sustained high demand for Reefer and Flatbed equipment, driven by summer goods and holiday season preparations. Expect heightened demand as agricultural yields continue to peak.
• Rate Increases: Spot rates are expected to rise further, influenced by ongoing consumer demand and seasonal trends.
• Potential Delays: Customers should prepare for potential delays and higher shipping costs, especially in regions affected by seasonal produce trends and ongoing construction projects.
• Post-August Market: The market is expected to stabilize post-August but will maintain elevated activity levels due to continuous produce shipments and construction projects in key regions like California, Texas, and the Midwest.

Seasonal Trends and Consumer Demand:

• Back-to-School and Holiday Shopping: Seasonal retail activities, including back-to-school and early holiday shopping (Prime Day), are driving up freight volumes and capacity demand, particularly affecting Dry Van equipment availability. Retail analysts report a 10% increase in consumer spending on school supplies compared to the previous year.
• Produce Season Impact: Ongoing produce season in California, Florida, and Texas is driving high demand for Reefer equipment. Specific crops such as grapes, broccoli, carrots, tomatoes, and strawberries are significantly contributing to this demand. USDA reports from July 2024 highlight a 12% increase in strawberry shipments from California.
• Construction and Flatbed Demand: Increased construction activities across the USA, particularly in Texas and California, are driving up demand for Flatbed equipment. Projects involving infrastructure upgrades and commercial developments are straining capacity and pushing up rates. The National Association of Home Builders reports a 20% increase in construction activity in the first half of 2024.
• Grain, Dairy, and Beverage Movements: Seasonal demand for grains (corn, soybeans), dairy products, and beverages (both alcoholic and non-alcoholic) is impacting freight demand, especially in the Midwest, California, and New York. Industry reports from July 2024 indicate a 15% increase in grain shipments compared to the same period last year.

Emerging Threats and Security Concerns:

• Incident Surge: In June 2024, 272 incidents were reported, reflecting a significant increase over the previous month. Food and beverage commodities, particularly non-alcoholic beverages, hard liquor, footwear, supplements, copper, and vehicle maintenance products, remain primary targets.
• Evolving Theft Techniques: Sophisticated fictitious pickup schemes in Southern California are bypassing identity verification and compliance tools, leading to an increase in cargo theft. The use of street transloads is becoming more common than public crossdock warehouses.
• Geopolitical Instabilities: Recent attacks by Houthi rebels in the Red Sea are causing diversions and delays in global shipping routes, contributing to overall supply chain disruptions. July 2024 reports indicate an increase in insurance premiums for shipments passing through the region.

Ocean, Air, Port, and Intermodal Impacts

• Ocean Freight Challenges: Ocean freight volumes are increasing, especially on the East Coast due to rerouted shipments from the West Coast. This shift has led to tighter capacity in ports like Savannah and Charleston. Geopolitical tensions, such as attacks in the Red Sea, are causing global shipping delays, resulting in longer transit times and higher freight rates.
• Air Freight Demand and Constraints: Air freight demand remains strong, driven by high-value and time-sensitive shipments in sectors like electronics and pharmaceuticals. However, capacity constraints due to limited aircraft availability and increased competition are pushing rates higher and causing potential delays. Businesses are advised to secure air freight capacity in advance and explore alternative routes.
• Predictions and Impacts: We anticipate ongoing congestion at major East Coast ports, particularly in Savannah and Charleston, due to increased rerouted shipments from Asia, leading to longer processing times and higher port fees. Ocean and air freight rates are expected to remain elevated due to high demand and capacity constraints, while spot rates for Van, Reefer, and Flatbed equipment are predicted to rise further due to seasonal demand, fuel price volatility, and tight capacity. Intermodal freight will continue to be a stable option for long-haul shipments, driven by its cost-effectiveness and reliability, with investments in rail infrastructure and technology improving efficiency. Geopolitical tensions and economic factors such as fluctuating fuel prices will continue to impact global shipping routes and freight costs, necessitating contingency plans to address potential disruptions.

Seasonal Trends

• Seasonal Trends for Van Shipments: The back-to-school season is significantly impacting Van shipments as retailers stock up on educational supplies, apparel, and electronics. This period typically sees increased freight volumes and tighter capacity, leading to higher spot rates. Additionally, preparations for the holiday season are expected to surge with the transportation of consumer goods, including toys, electronics, and household items. This trend usually begins in late summer and peaks in early fall, creating a ripple effect on freight rates and capacity. Shippers should plan for increased demand and secure capacity early to avoid premium rates and potential disruptions.
• Seasonal Trends for Reefer Shipments: The ongoing produce season in regions like California, Florida, and Texas is driving high demand for Reefer equipment. Key crops such as grapes, broccoli, carrots, tomatoes, and strawberries are in peak harvest, requiring temperature-controlled transportation to maintain freshness. This seasonal demand leads to higher spot rates and tighter capacity, especially in agricultural hubs, necessitating early booking and strategic planning for shippers. Additionally, summer months typically see an increase in dairy and beverage shipments, particularly for items like milk, cheese, and non-alcoholic beverages. This spike is driven by higher consumption rates during warm weather and increased production to meet demand, making it crucial for shippers to secure reliable carriers and plan their logistics well in advance.
• Seasonal Trends for Flatbed Shipments: Summer is peak construction season, leading to a surge in demand for Flatbed equipment to transport building materials such as steel, lumber, and concrete. Major infrastructure projects, highway expansions, and commercial developments in states like Texas and California are significantly contributing to this demand. Shippers in the construction industry should anticipate higher rates and limited availability, making early booking and strong carrier relationships essential. Additionally, there is a notable increase in the movement of agricultural equipment and supplies, such as tractors, irrigation systems, and fertilizers, particularly in agricultural states like Iowa, Nebraska, and Kansas. The heightened activity in this sector drives up demand for Flatbed services, impacting rates and capacity availability.

BM2 NEWS

• BM2 is a proud member of CSCMP! We sponsor round tables in multiple markets, as well as encourage our team members to learn from the CSCMP events. BM2 will be at the 2024 CSCMP Edge conference in Nashville TN (Sept 29 – Oct. 2). Reach out to us to connect if you will be there as well!
• BM2 continues to dedicate resources to improving its technology. Recently, we launched Dialpad. A dynamic phone software, which allows us to connect and communicate with our customers and carriers in a more streamlined way. If you want to learn more about this integration, please read the article posted by Dialpad and BM2’s Director of IT, Kevin Ruschman. (How BM2 Freight Services Future-Proofs its business with Dialpad Ai | Dialpad)

DID YOU KNOW

• At BM2 Freight, we’re passionate about leveraging technology to enhance our services! Nearly 90% of all BM2 shipments are tracked through our technology providers, giving you real-time visibility into the whereabouts of your freight at every stage of its journey. What if a driver turns off tracking or fails to accept tracking? Rest assured, BM2 has your back. We go the extra mile by maintaining direct communication with our drivers throughout the shipment, ensuring updates are provided manually if necessary. While some may consider this approach old-school, we believe it’s essential for proactive engagement with our drivers to deliver the best service and prevent issues before they occur. When technology encounters hiccups, count on BM2 Freight to deliver the answers you need!

INDUSTRY NEWS TO KNOW

• CargoNet | The cargo theft prevention and recovery network
• State of Freight Today (ftrintel.com)
• US ports by volume: How maritime cargo trends are stacking up | Supply Chain Dive
• Gasoline and Diesel Fuel Update – U.S. Energy Information Administration (EIA)
• Truck Tonnage Index (TRUCKD11) | FRED | St. Louis Fed (stlouisfed.org)
• All Employees, Truck Transportation (CES4348400001) | FRED | St. Louis Fed (stlouisfed.org)
• Producer Price Index by Industry: Truck Trailer Manufacturing: Truck Trailers and Chassis, Axle Rating 10,000 Pounds or More (PCU3362123362121) | FRED | St. Louis Fed (stlouisfed.org)
• State of Freight for July: ‘Bullish’ market coming for freight economy – FreightWaves
• How freight fraud became the perfect crime – FreightWaves