The final quarter of the year is upon us and we’re asking the same question we’ve been asking all year: When will the market finally flip?
Let’s talk about the current state of the market and what CPG shippers are up against heading into Q4 2024.
What Could Impact My Freight in Q4?
Inflation
Inflation can have ripple effects on the cost of fuel, equipment, labor, insurance, and inventory storage. The Federal Reserve sets a target rate of 2% for maximum employment and price stability.
Inflation rates have consistently decreased over the last few months, now residing at 2.5% at the end of August 2024. We have come a long way since rates slowly skyrocketed up to 9.1% in June 2022 and this is the lowest rates have been since February 2021.
Fuel Prices
When the price of fuel goes up, carriers are required to increase their rates or take some losses.
In April 2024, we reported an average diesel price of $3.517 per gallon and in July 2024 that figure rose to $3.813. As of October 1, the price has fallen once again to $3.544.
Demand for Trucks
Many logistics experts are calling the current state of the market “the longest freight recession we’ve ever seen.” It’s been hard to predict if and when the market will boom again.
We do know that Q4 does not anticipate any scheduled CVSA road checks that threaten to disrupt capacity. However, Halloween, Thanksgiving, and Christmas volumes are right around the corner which also means peak times for supply chain disruption are upon us.
Hurricane Season
Hurricanes can bring fierce winds and flooding that damage infrastructure and physical assets. Often in the face of this risk, manufacturers or shipping facilities will shut down operations to avoid jeopardizing the safety of employees and company property. On the carrier side of inclement weather, drivers usually either refuse to go to high-risk markets during storm activity or demand much higher rates in order to do so.
So far, the 2024 Atlantic hurricane season has caused at least 213 fatalities and at least $31 billion in damages, primarily from hurricanes Beryl and Helene. Peak hurricane season lasts through the end of November, so shippers should certainly prepare for possible disruptions and challenges ahead.
FedEx, UPS and US Postal Service recently reported supply chain disruptions caused by Hurricane Helene. The carriers halted some deliveries in Florida as the storm slammed the southern U.S. at the end of September 2024.
Produce Season
Produce season can impact CPG shippers when carriers begin devoting trucks to moving high crop volumes. This additional volume can tighten capacity, drive up rates, and make for some challenging conditions for shippers who don’t prepare accordingly.
Produce season runs mid-spring through mid-summer for most U.S. states, but there are a few whose peak season runs in the back half of the calendar year. Refrigerated transportation in particular will be at a premium during peak seasons.
Check out our state-by-state produce season guide so you know when and where to expect disruption.
Port Strike
Approximately 50,000 dockworkers walked off the job at East and Gulf Coast ports starting at 12:01 a.m. EST on October 1, 2024 after failing to reach an agreement with ports ownership on a new contract. This is the union’s first strike since 1977 and could become the most disruptive strike to the U.S. economy in decades, stopping the flow of a wide variety of goods through almost all cargo ports on the East and Gulf Coasts.
How Are Freight Market Dynamics Trending Into Q4?
For insights on what’s to come in the final quarter of the year, tune into The TRUCK YEAH! Podcast presented by Zipline Logistics. This episode features your hosts, Teddy Lee Knox and Jesse Juett along with special guest and one of our Carrier Sales Representatives, Logan Smith.
Have more questions about the freight market?
