Industry Market Trends

GENERAL MARKET TRENDS

Fuel Index:

• Diesel National Averages:
  • This Week: $3.503/gallon
  • Last Week: $3.476/gallon
  • Weekly Change: $0.027
  • Year-over-Year Change:  $0.373

Summary: Diesel prices have increased by $0.027 per gallon compared to the previous week, reflecting fluctuations in crude oil prices and seasonal demand variations. However, there is a year-over-year decrease of $0.373 per gallon, indicating a downward trend over the past year.

Looking ahead, potential Q1 2025 tariff implementations could drive a pull-forward of imports, placing pressure on logistics costs and diesel demand. Analysts forecast a 5-10% increase in diesel prices if tariffs are enacted, likely creating inflationary pressures across the supply chain. However, any potential domestic energy policy changes, such as expanding refining or drilling, may stabilize or slightly reduce costs mid-year.

Reference: Gasoline and Diesel Fuel Update – U.S. Energy Information Administration (EIA)

RPM Monthly Movers:

• National RPM Month-to-Month Changes:
  • Dry Van Markets (November – December) $0.08
  • Reefer Markets (November – December) $0.00
  • Flatbed Markets (November – December) $0.02

POTENTIAL MARKET DISRUPTORS

Seasonal Trends:

• Post-Holiday Freight Volumes: Easing nationally, but Midwest and Northeast restocking lanes remain active.
• Produce Season: Reefer demand continues in the Southwest and Mexico, with frost risks driving volatility.

Ongoing West Coast Surge:

• Volume Trends: West Coast ports, including Los Angeles and Seattle, are experiencing elevated activity, with volume increases of 15-20% noted due to a combination of holiday imports and labor disruptions on the East and Gulf Coasts.
• Shipper Reactions: The impending ILA strike deadline (January 15, 2025) at East Coast ports has led many shippers to divert freight to West Coast routes.
• Inland Impacts: This redirection is creating pressure on inland infrastructure, especially intermodal hubs, as rail and truck networks absorb the increased volumes.

 ILA Strikes:

• Labor disruptions at Gulf and East Coast ports may lead to significant delays and rerouting to alternate ports.
• Expect regional rate surges for Dry Van and Rail services as shippers adjust routing strategies.

Cargo Theft Risks:

• High-value shipments (e.g., electronics, consumer goods) face heightened risks during winter delays.
• Preventive Measures: Secure trailers with ISO-compliant seals, use GPS tracking, and avoid leaving freight unattended in high-theft areas.

MARKET PREDICTIONS

Capacity Trends:

• Dry Van: Overcapacity persists but will rebalance by late 2025, with Midwest lanes tightening earlier.
• Reefer: Seasonal tightness in Southwest and border lanes will dominate Q1.
• Flatbed: Steady with localized demand in Gulf recovery regions, rebounding in Q2 with infrastructure projects.

Rate Trends:

• Dry Van: Gradual growth in Q1, supported by Midwest restocking and retail demand.
• Reefer: Year-over-Year growth of +12% by Q3, driven by produce and pharmaceutical shipments.
• Flatbed: Stable through Q1, with modest increases in Q2 tied to infrastructure projects.

Post-January Market:

• Capacity Rebalancing:
  • After the brief easing of capacity in January, market conditions in February are expected to tighten slightly in response to restocking activity and infrastructure recovery projects, particularly in warmer regions.
  • Ongoing winter weather in the Midwest and Northeast may temporarily strain capacity, causing regional rate fluctuations.
• Tariff Implementation Impact:
  • If new tariffs take effect in Q1 2025, a surge of imports from Asia could continue into February, maintaining elevated activity at West Coast ports.
  • This pull-forward of freight may lead to congestion in intermodal and rail networks, particularly at inland hubs such as Chicago and Dallas.
• Reefer and Dry Van Demand:
  • Reefer: Winter produce seasons in the Southwest and Mexico will sustain demand through February, with slight increases anticipated for seasonal produce exports.
  • Dry Van: Moderate demand will persist due to late restocking and shifts in supply chain patterns caused by port diversions.
• Outlook for February:
  • February will reflect a transitionary period with continued volatility driven by geopolitical and tariff-related uncertainties. Reefer and Dry Van markets may see demand normalization by late February, while Flatbed rates are expected to begin recovering as infrastructure projects pick up momentum in warmer regions. The conclusion of holiday demand will bring a short-lived easing of capacity in January. However, the potential implementation of new tariffs in Q1 2025 may drive a pull-forward of imports, creating near-term volatility. Reefer and Dry Van demand may also see incremental boosts from post-holiday restocking activity.

SEASONAL TRENDS AND CONSUMER DEMAND

Holiday and Produce Impacts:

• • Dry Van: Active in Midwest and Northeast lanes for post-holiday restocking.
  • Reefer: Dominated by cross-border produce shipments and seasonal greens, with frost risks impacting capacity.
  • Flatbed: Declines outside of warm regions, but demand rebounds with infrastructure project launches.

TLDR: Seasonal Trends

• Van Shipments:
  • Rates rose during the holiday season due to weather disruptions and demand peaks.
  • A slight dip in January is expected, followed by a potential rebound in February tied to restocking and tariff-driven imports.
• Reefer Shipments:
  • Rates remain elevated, driven by strong produce demand and weather-driven capacity constraints.
  • Expect tight capacity and high rates to persist through early 2025, supported by Southwest and Mexico produce seasons.
• Flatbed Shipments:
  • Rates declined seasonally but remain supported by Gulf Coast and Coastal Appalachia recovery projects.
  • Capacity is steady, with demand expected to recover in Q2 as infrastructure projects increase.

BM2 NEWS

BM2 is proud to support meaningful causes through charitable contributions. Recently, we made a donation to Welcome House Inc., an organization committed to ending homelessness and helping individuals regain stability. We are grateful for the opportunity to contribute to such a remarkable mission.

BM2 would like to take a moment to express our heartfelt gratitude to our incredible customers and carriers. Your trust and partnership are the driving forces behind our success. As we celebrate this season of giving, we want to wish you and your loved ones a joyful and memorable holiday season. Thank you for being an essential part of the BM2 family!

DID YOU KNOW?

BM2 moved about 10,000 food and beverage shipments in 2024 (9752 to be exact)!

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)

CargoNet | The cargo theft prevention and recovery network

Cargo Theft Surges to Record Levels as Holiday Season Approaches, Verisk CargoNet Analysis Shows | Verisk

Exclusive | Holiday heist diverts $1M in toys on 3 different trucks in new type of scam

Canada diesel prices, 23-Dec-2024 | GlobalPetrolPrices.com

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)

E-Commerce Retail Sales (ECOMSA) | FRED | St. Louis Fed (stlouisfed.org)

United States LMI Logistics Managers Index (tradingeconomics.com)

The Cass freight index | FRED Blog (stlouisfed.org)

United States Building Permits

Worldwide Retail Ecommerce Forecast 2024 Midyear Update (emarketer.com)

Farmer’s Report – Produce Prices & Market Trends | US Foods

US_2024.pdf (usda.gov)