Industry Market Trends

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

Current Market:

• Agricultural and Seasonal Trends: As we move into September, the Midwest is expected to continue experiencing high demand for freight services, driven by ongoing agricultural shipments. The harvest season for key crops like corn and soybeans will be in full swing, maintaining tight capacity and elevated spot rates for Reefer and Dry Van equipment. The record yields observed in August are anticipated to extend into September, sustaining this trend. The increased export demands that began in late summer will likely persist, keeping rates high and capacity tight.
• Back-to-School Freight Demand: The demand for Dry Van equipment is expected to slightly ease in early September as the back-to-school rush winds down. However, this temporary relief may be short-lived as retailers begin preparing for the upcoming holiday shopping season. The high inventory levels noted in August will influence September’s freight dynamics, with retailers aiming to restock and reposition goods in anticipation of increased consumer spending.
• Construction Projects: September typically marks a high point for construction activities, particularly in Texas and California. The demand for Flatbed equipment will likely remain strong as major infrastructure and development projects continue. Data from August, showing a significant increase in construction permits, indicates that this trend will continue, with high Flatbed demand and increased competition for available capacity.
• Port Operations: The East Coast ports, especially Savannah, are expected to face ongoing congestion in September due to rerouted shipments from the West Coast. Although the improvements at West Coast ports have alleviated some pressure, the continued high volume at East Coast ports will likely keep delays and capacity challenges in play. August’s 25% increase in container volumes at these ports suggests that shippers should prepare for sustained congestion and plan accordingly.

Market Predictions:

• Capacity Trends: As we move into September and the upcoming Q4 2024, we anticipate a gradual tightening of capacity across all equipment types, including Dry Van, Reefer, and Flatbed. This is due to increased retail demand driven by holiday preparations, ongoing agricultural activities, and construction projects. The post-summer peak in shipping volumes typically eases slightly, but the buildup to the holiday season will soon reverse this trend, particularly impacting major distribution hubs and urban areas.
• Rate Trends: Spot rates are expected to begin rising steadily as we approach the peak holiday shipping season. Historical trends show that demand increases for Van equipment, particularly for moving consumer goods, will lead to rate hikes. Seasonal agricultural shipments and continued construction activities will maintain pressure on Reefer and Flatbed rates in select regions.
• Post-September Market: As we transition into the fall, market activity may begin to stabilize; however, the lead-up to the holiday season will keep freight demand high. The ongoing agricultural and construction projects will continue to support elevated market activity levels.

Seasonal Trends and Consumer Demand:

• Back-to-School and Holiday Shopping: August’s back-to-school shopping led to an 8-10% increase in consumer spending, boosting freight demand​. This surge will taper off in early September, creating a brief lull. However, freight demand will rise again by late September as retailers gear up for the holiday season, particularly for Black Friday and Cyber Monday. This preparation phase will tighten capacity and may increase spot rates, marking the start of a busy end-of-year shipping period.
• Produce Season Impact: The demand for Reefer equipment will stay high in September, driven by ongoing harvests across key agricultural regions. California, Florida, and Texas continue to see strong demand due to grapes, tomatoes, and strawberries. The Midwest is also a critical player, with apple and corn harvests ramping up in Illinois, Iowa, and Michigan. Tight capacity and elevated rates are expected to persist, particularly in these areas. As the season progresses, shippers should anticipate potential delays and plan for higher costs due to increased demand.
• Construction and Flatbed Demand: The U.S. construction industry shows mixed results in 2024. In July, building permits fell by 7% year-over-year, indicating a slowdown in new residential projects. However, total construction starts increased by 10%, driven by a strong rise in nonresidential buildings and infrastructure projects​, with California; has seen a 13% increase in single-family home permits, reflecting strong demand for residential housing. Conversely, multifamily housing permits dropped by 27%, the lowest in over a decade, signaling a shift towards less dense housing options and Texas; continues to experience robust construction activity, with a 41% increase in residential construction permits in the first half of 2024. This growth supports high demand for flatbed trucks to transport building materials​.
  • Regions with Low Starts or Decline:
    • Midwest: Significant declines in construction activity continue, making it the region with the most pronounced downturn in July 2024​.
    • Northeast: Both new construction and alteration activities have declined year-over-year​.
    • Southwest: A slight decline in new construction starts reflects potential market saturation and higher borrowing costs​.
• Grain, Dairy, and Beverage Movements: Seasonal demand for grains and beverages will continue to drive freight volumes in the Midwest, California, and New York. The increase in grain shipments observed in August is expected to persist, supporting high demand for transportation services in September.

Ocean, Air, Port, and Intermodal Impacts

• Ocean Freight Challenges: The increase in ocean freight volumes seen on the East Coast due to rerouted shipments will likely continue into September. Geopolitical tensions, such as those affecting shipping routes through the Red Sea, will contribute to global shipping delays, influencing freight planning and costs.
• Air Freight Demand and Constraints: Air freight demand will remain strong in September, driven by the need for quick transport of high-value and time-sensitive goods. The limited availability of aircraft observed in August will continue to pose challenges, making it critical for businesses to plan ahead and secure capacity early.
• Rail Strike Resolution: What Happened and What Was Avoided:
  • Quick Resolution of the Rail Strike: The recent rail strike in Canada, involving two major rail operators, was swiftly resolved through negotiations, avoiding significant disruption. The strike, which focused on labor contracts, was quickly settled to prevent delays in shipments across critical supply chains.
  • Potential Impact of the Strike: Had the strike continued, it could have severely impacted the transport of essential goods, especially grain shipments from the Midwest to export ports, disrupting the North American supply chain. Prolonged disruption would have led to shortages, increased shipping costs, and delays in goods reaching their destinations, significantly affecting industries dependent on rail transport.
  • What Was Staved Off: With the quick resolution, the economy avoided a potential ripple effect of supply chain delays, increased freight rates, and congestion in other modes of transport as companies sought alternatives. This also helped maintain stable prices for consumers and ensured that businesses reliant on timely rail shipments continued their operations without interruption.
• Predictions and Impacts: The congestion and high demand at major East Coast ports will continue, affecting processing times and shipping costs. Rates for all types of freight equipment are expected to remain elevated due to persistent high demand, seasonal factors, and the impact of fluctuating fuel prices. Intermodal solutions will remain a reliable and cost-effective option for long-haul transportation, with investments in rail infrastructure supporting efficient freight movement.

Seasonal Trends

• Van Shipments: After the back-to-school rush, which led to an increase in freight demand, a slight dip is expected in early September. However, demand will likely pick up again towards the end of September as retailers start stocking up for the holiday shopping season. The transition from the back-to-school period to holiday preparations means that while there may be a brief lull, overall, the demand for Van equipment will remain high. Shippers should plan early to avoid capacity shortages and potential rate increases as holiday preparations accelerate
• Reefer Shipments: Reefer demand will remain strong through September, driven by ongoing produce harvests, particularly in states like California, Texas, and Florida. Crops such as apples, grapes, and various vegetables will continue to require temperature-controlled transportation. In addition, the increase in dairy and beverage shipments typically seen in September will add to this demand. The higher rates and tight capacity observed in August are expected to persist, necessitating early bookings and strategic planning to manage logistics effectively.
• Flatbed Shipments: While the demand for Flatbed equipment will remain high in September due to ongoing construction projects, this demand is expected to decline as we move into Q4. As winter approaches, construction activity typically slows down, which may ease some of the capacity constraints. However, in the immediate term, shippers can still expect high demand and tight availability, particularly in areas with significant infrastructure projects.

BM2 NEWS

• We proudly welcomed 5 new team members to the BM2 Crew! From new college Grads to talented professionals changing industries, our newest class proves that careers in freight are limitless!
• Community engagement. BM2 is excited to be engaged in a partnership with NKU college of business. Our engagement into the success of the students at this university has provided internships, community engagement opportunities for BM2 and New graduates!
• August 28th, 2024 – BM2 very own Snr. Operations Support Manager Carla Bay, was a moderator on T&LC Virtual Workshop for Claims & Loss Prevention!

DID YOU KNOW

• At BM2 Freight, we uphold a 75% prebook percentage for shipments tendered to us with a 24-hour lead time. This proactive approach ensures that drivers are assigned to your shipments in advance, minimizing the risk of service failures, delays, and increased costs due to fallouts. Trust BM2 Freight to deliver your goods reliably and efficiently.

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)
• Canada diesel prices, 19-Aug-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)
• Construction Snapshot for July 2024 – Building Permit Data
• 2024 back-to-school survey | Deloitte Insights
• Back-to-school survey shows increased spending for US consumers – Retail Insight Network (retail-insight-network.com)
• USDAFarmer’s Report – Produce Prices & Market Trends | US Foods
• US_2024.pdf (usda.gov)
• How freight fraud became the perfect crime – FreightWaves

Industry Market Trends

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

• Current Market Surge: The Midwest is beginning to experience its seasonal surge in freight demand due to agricultural shipments and holiday trends, this is causing relatively tighter capacity and higher spot rates for Reefer and Dry Van equipment. Ongoing construction projects are driving up demand for Flatbed equipment, particularly in Texas and California.
• Market Predictions: We expect the freight market to remain relatively tighter in the Midwest and Southeast over the next month, with continued high demand for Reefer and Flatbed equipment. Spot rates are likely to increase further as we approach the July 4th holiday, driven by increased consumer demand for summer-related goods. Customers should plan for potential delays and higher shipping costs, particularly in regions affected by seasonal trends and ongoing construction projects. Post-July 4th, the freight market is expected to stabilize but maintain elevated activity levels due to ongoing produce shipments and construction projects. Key produce regions will include: California, Northern Florida, Texas, and the Midwest
• July 4th Holiday Impact on Freight: As the July 4th holiday approaches, we anticipate elevated freight costs, particularly in the Midwest, due to the peak grilling season. This period typically sees increased movement from meat processing plants, driving up demand for Reefer equipment. Dry Van freight will also experience a surge in activity, moving products such as alcohol, condiments, and other summer-related goods. This seasonal increase in demand pairs with the current spikes in produce rates, contributing to the expected rise in freight rates. Overall, the upcoming holiday period will likely amplify the seasonal trends already observed, leading to higher freight costs and relatively tighter capacity in key markets. This aligns with the typical patterns seen during summer months when consumer demand for various products peaks.
• Incident Surge and Commodity Targets: In May 2024, 272 incidents were reported, reflecting a significant 20% increase over the previous month and a 36% rise year-over-year. The primary targets remained food and beverage commodities, with a notable uptick in thefts of non-alcoholic beverages like sparkling waters and energy drinks, as well as hard liquor. Additionally, there was a marked increase in thefts of footwear, supplements such as creatine and vitamins, copper, and vehicle maintenance products including tires and motor oils.
• Evolving Theft Techniques: Sophisticated fictitious pickup schemes in Southern California have emerged, where groups use advanced methods to bypass identity verification and compliance tools. These methods include misdirecting freight to street transloads, which has become more common than public cross dock warehouses, allowing increased theft frequency due to the availability of box trucks and drivers. With these evolving tactics, an increase in cargo theft is anticipated in the coming months compared to Q1 2024

Ocean, Air, Port, and Intermodal Impacts

• Increased Port Congestion: Port congestion on the West Coast is growing again, particularly in the ports of Los Angeles and Long Beach. The number of ships waiting to berth has increased, leading to backlogs and longer transit times for shipments. This resurgence in congestion is primarily due to increased import volumes from Asia. Additionally, recent attacks by Houthi rebels in the Red Sea are causing diversions and delays in global shipping routes.
• Current Market Trends: Ocean freight volumes are increasing, particularly on the East Coast, as shippers reroute cargo from congested West Coast ports. This is leading to higher demand and relatively tighter capacity in the Southeast. Air freight demand remains strong, driven by high-value and time-sensitive shipments, particularly in the electronics and pharmaceutical sectors.
• Predictions and Impacts: We anticipate continued high volumes and congestion at major ports, particularly on the West Coast. This will likely impact schedules and increase freight rates for both ocean and inland shipments. Customers should consider alternative routes and modes of transport to mitigate potential delays. Intermodal freight volumes are expected to remain stable, providing a viable option for long-haul shipments.

Seasonal Trends

• Seasonal Retail Activities: Seasonal retail activities, including back-to-school and holiday shopping, will drive up freight volumes and capacity demand. Key regions are expected to experience increased demand, impacting spot rates and availability.
• Produce Season Impact: The ongoing produce season in regions like California, Florida, and Texas, is driving up demand for Reefer equipment. Customers should plan for higher rates and relatively tight capacity during this period. Specific crops expected to move include: California (grapes, broccoli, carrots, tomatoes, and strawberries), Florida (oranges and strawberries), Texas (avocados, tomatoes, and other vegetables).
• Construction and Flatbed Demand: Increased construction activities, particularly in Texas and California, are driving up demand for Flatbed equipment. This trend is expected to continue, impacting availability and rates. Projects in Texas, including the expansion of highways and new commercial developments, are significantly increasing the need for building materials such as steel, lumber, and concrete. In California, ongoing infrastructure upgrades and residential construction in urban areas are also boosting demand for flatbed services. Additionally, the Gulf Coast region, particularly Louisiana and Alabama, is seeing a rise in petrochemical plant construction, further straining flatbed capacity.
• Grain, Dairy, and Beverage Movements: Seasonal demand for grain, dairy, and beverage shipments is impacting capacity and rates, particularly in the Midwest, California, and New York. Key grains include corn and soybeans in the Midwest, while dairy movements are significant in states like California and Wisconsin. Beverage shipments, particularly alcoholic beverages, see increased movement during the summer months.

BM2 NEWS

• Food Logistics named BM2 Freight Services, Inc as a recipient of the 2024 top 3PL & Cold Storage Providers award. How Top 3PL & Cold Storage Providers Cultivate Resilience in Transportation | Food Logistics
• Food and beverage is one of BM2’s largest verticals. Shipping nearly 10,000 truckloads in the last 12 months! Customers continue to trust BM2 when it comes to shipping food products due to our industry leading claims percentage of .25% (51 claims filled on 20,735 shipments for 2024). Know you are protected when you ship with BM2!

DID YOU KNOW

• At BM2 Freight, we boast an industry-leading claims percentage. Only 0.25% of shipments result in a claim situation at BM2! Wondering why our claims-to-load ratio is so low? It’s because we implement a meticulous carrier onboarding and selection process, coupled with industry-leading internal procedures designed to prevent issues before they even arise. Trust BM2 Freight to prioritize the safety and security of your shipments.

INDUSTRY NEWS TO KNOW

• CargoNet | The cargo theft prevention and recovery network
• State of Freight Today (ftrintel.com)
• State of Freight: Fuller highlights connections between housing market and trucking  – FreightWaves
• 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)
• Overseas shipping problems remain largely under consumers’ radar – FreightWaves

Logistics industry market trends you need to know.

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

• Panama Canal Optimism: With recent rains alleviating drought conditions, the Panama Canal Authority is expanding transit slots for Panamax vessels. As water levels in Gatun Lake rise, the outlook for canal operations and shipping efficiencies brightens, suggesting a smoother transit flow by 2025.
• Election Anticipations: Upcoming presidential elections in Panama could pivot canal policies significantly, especially concerning the $2 billion Indio River project that aims to increase transits and provide potable water, highlighting the strategic interplay between infrastructure and environmental stewardship.

SEASONAL TRENDS:

TRANSPORTATION EVENTS:

• International Roadcheck Week (May 14th-16th)
  • Alcohol and drug substances and tractor protection systems will be the focus.
• Broker Carrier Summit (April 22-24)

UPCOMING HOLIDAYS:

• Tax Day was yesterday
• Memorial Day (Monday, May 27)

WEATHER IMPACT

Plains and Mississippi Valley: Severe Weather and Flash Flooding Risk

• Timing: Intensifying storm system affecting the Plains on Monday, and the Mississippi Valley on Tuesday.
• Impact: Severe thunderstorms with a chance of very large hail, damaging winds, and isolated tornadoes. An Enhanced Risk (level 3/5) of severe thunderstorms is forecast from western Nebraska/South Dakota southward through the central Plains. A Slight Risk (level 2/5) extends into the southern Plains. Isolated flash flooding is possible, particularly where storms are more widespread.

Upper Ohio Valley through the Mid-Atlantic: Scattered Severe Thunderstorms

• Timing: Monday.
• Impact: A slight risk of severe weather centered around the Tidewater region of Virginia. Potential hazards include large hail and damaging winds.

Northern Cascades, Northern/Central Rockies, and Eastern Great Basin: Moderate to Heavy Snowfall

• Timing: Next couple of days.
• Impact: Winter weather advisories/warnings in effect. Expected snow accumulations of 6-12 inches or more at higher elevations.

Central/Eastern U.S.: Well Above Average Temperatures

• Timing: Monday.
• Impact: Temperatures in the 80s across the central/southern Plains, Mississippi Valley, and into the Mid-Atlantic/Southeast, with some areas possibly reaching the 90s. Critical Risk of Fire Weather on Monday due to hot temperatures and dry conditions.
  WPC’s Short Range Public Discussion (noaa.gov)

INDUSTRY NEWS TO KNOW

• State of Freight: Reasons to be bullish on second half of 2024 – FreightWaves
• State of Freight takeaways: Is a weak February the bottom of the cycle? – FreightWaves
• All quiet on the diesel front, for now: Benchmark price up slightly – FreightWaves
• Port Houston shows import strength in February – FreightWaves
• Baltimore port closure puts truck drivers who haul autos in a bind – FreightWaves
• Automakers reroute shipments after Baltimore bridge collapse | Supply Chain Dive
• Port of Baltimore stops accepting export containers | Supply Chain Dive
• Port of Baltimore halts vessel traffic after bridge collapse | Supply Chain Dive
• workers missing in Francis Scott Key Bridge collapse presumed dead – FreightWaves
• Baltimore bridge collapse disrupts traffic, port operations after ship collision – FreightWaves
• Some states urge truck drivers to avoid working during upcoming eclipse – FreightWaves

Like being in the know? Get our biweekly Logistics Market Report delivered straight to your inbox. Sign up here.

Logistics industry market trends you need to know.

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

• Port of Los Angeles and Port of Long Beach experienced significant year-over-year increases in cargo volumes in January 2024, driven by Lunar New Year demand spikes and concerns over Red Sea geopolitical tensions. This underscores the critical role of West Coast ports in adapting to global trade dynamics.
• Georgia Ports Authority (Port of Savannah) reported two consecutive months of growth at the start of 2024, with a notable 14% year-over-year increase in February 2024. This growth, supported by increased rail moves, highlights the port’s expanding role in facilitating key exports and imports.
• Port of Virginia saw a notable turnaround with a 10% year-over-year increase in February 2024, after a dip in January, reflecting efforts to accommodate larger ships and its strategic importance on the East Coast.
• Port Houston set a record for January 2024, with a 4% year-over-year increase, emphasizing its growing importance in the Gulf Coast region, driven by strong imports from China ahead of the Lunar New Year.
• Port operations face challenges such as environmental mandates and the need for infrastructure improvements.
  • Technological integration and strategic planning are critical in enhancing efficiency and mitigating congestion.
    • These efforts align with broader market trends, suggesting that strategic adaptations to economic signals and technological advancements will drive significant changes in port activity and maritime freight operations.

SEASONAL TRENDS:

• Spot Rate Trends:
  • Rates showing signs of stabilization and expected gradual increases into Q2 2024.
    • This trend is reminiscent of the recovery phases observed in past cycles, particularly mirroring the dynamics of 2018 and 2019. Economic uncertainties and shifts in consumer demand continue to play a significant role in shaping the rate landscape across all segments.
• Seasonal produce shipments in early spring may contribute to a gradual increase in rates.
  • Though the season has begun relatively slow. States “In Season” CA (leafy greens, in March broccoli, cauliflower, strawberries peak in April), FL (Citrus peak in March, Strawberries started and peak in April), TX Citrus, AZ (leafy greens), and GA (Onions in April)
• Capacity:
  • The market is experiencing a transformation rather than a contraction in capacity.
  • Technological innovations and strategic workforce management are pivotal in addressing current capacity challenges. Large carriers absorbing excess drivers and the integration of AI and robotics for operational efficiency indicate a shift towards a more technologically advanced and efficient freight market.
    • This evolution suggests that capacity issues may not lead to an immediate correction in rates but rather to a gradual adaptation of the market to new dynamics

TRANSPORTATION EVENTS:

• International Roadcheck Week (May 14th-16th)
  • More information to come regarding safety checks

UPCOMING HOLIDAYS:

• Easter (March 31)
• End of Ramadan (April 8)

WEATHER IMPACT

Central Colorado and Four Corners Region: Heavy Snow

• Timing: Wednesday night into Friday.
• Impact: A long-duration snow event is forecasted, with the heaviest snow expected across the Front Range of Colorado, including areas like Boulder and Denver. Snowfall may exceed a few feet in some areas, with 1-2 inches per hour rates possible, leading to hazardous travel conditions.

Midwest to Southern Plains: Strong to Severe Thunderstorms

• Timing: From this evening into Thursday.
• Impact: The risk of strong to severe thunderstorms brings the potential for damaging winds, hail, and possible tornadoes. This severe weather threat extends to the Mid-South from Thursday evening into early Friday.

Southern Plains to Mid-South: Excessive Rainfall and Severe Weather Threat

• Timing: Thursday evening into early Friday.
• Impact: Enhanced rainfall and severe weather, including the potential for flash flooding and severe thunderstorms, could impact areas from Arkansas and neighboring areas, shifting towards Tennessee by Friday morning.

Eastern U.S.: Very Warm and Pleasant Weather

• High temperatures in the 60s and 70s, significantly above normal, are expected from the Ohio Valley to the Mid-Atlantic states.WPC’s Short Range Public Discussion (noaa.gov)

INDUSTRY NEWS TO KNOW

• Class 8 Truck Sales Continue Downward Trend in February | Transport Topics (ttnews.com)
• Shippers should lock in trucking rates soon: experts | Supply Chain Dive
•  East Coast, Gulf Coast Dockworker Talks Are Starting Under Threat of a Strike – WSJ
• US container imports robust in February; volume forecast dicier – FreightWaves
•  What we learned at Manifest Vegas 2024 | Supply Chain Dive
• How the SEC climate rule will impact manufacturers’ supply chains | Supply Chain Dive

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