Transportation

In the News

Innovation Trends 

Real Estate

Q3 2024

SUPPLY CHAIN

TRENDING

TRANSPORTATION / DISTRIBUTION / ECOMMERCE / MATERIAL HANDLING / INNOVATION

TRANSPORTATION

Truckload

Is this the end of the freight recession? June 2024 saw transportation prices expanding faster than capacity for two consecutive months, the first time since Q1 2022.

​

Transportation capacity contracted for the first time since March 2022. This is partly due to more carrier bankruptcies, such as U.S. Logistics Solutions shuttering at the end of June, laying off approximately 2,000 employees. While this came as a surprise to many at the company, it does follow the trend of capacity exiting the market as freight moves back towards equilibrium. Peak season may move the market back into growth.

Transportation Prices & Capacity 2022-2024

DAT Load to 
Truck Ratio

DAT National 
Freight Rates

80.0

70.0

60.0

50.0

40.0

30.0

20.0

Apr 22

Jun 22

Jul 22

Oct 22

Jan 23

Feb 23

Apr 23

Jun 23

Jul 23

Oct 23

Jan 24

Feb 24

Apr 24

Jun 24

May 22

Sep 22

Nov 22

Dec 22

Mar 23

May 23

Aug 23

Sep 23

Nov 23

Dec 23

Mar 24

May 24

Aug 22

$3.25

$3.00

$2.75

$2.50

$2.25

$2.00

$1.75

$1.50

$1.25

$1.00

$0.75

$0.50

$0.25

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Jul

10

9

8

7

6

5

4

3

2

1

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Transportation Capacity

Transportation Prices

Breakeven

Spot Rates

Contact Rates

2024

2023

2022

Source: https://www.the-lmi.com/june-2024-logistics-managers-index.html

Moving Forward

Doing nothing now puts your 2025 budget at risk

​

CLICK TO EXPLORE

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lTL

LTL Contract 

Final reporting of average base rate per 100 lbs 
(United States of America)

55.00

5.50

DOE.USA

53.00

4.034

50.00

5.00

45.00

4.50

4.02

40.00

3.50

35.00

3.00

30.00

2.50

25.00

Apr

Jul

Oct

2021

Apr

Jul

Oct

2022

Apr

Jul

Oct

2023

Apr

Jul

Oct

2024

  • CWT average has started off at $48 in 2024 - 6% increase over 2023.
  • Base rates have increased more in the last 6-8 months as fuel has returned to $4.00/gallon.
  • Overall tonnage is down from 2023 to 2024.
  • Although tonnage is down in the LTL industry most carriers have improved their OR with XPO making the biggest jump.
  • Carriers are being mindful of operating costs across the industry. As we see ODFL continue to operate in the 70's this is the benchmark for other LTL providers to get to.

​

NMFTA is making changes for 2025. As 2024 progresses, the process is set to become more intensive, informative, and inclusive. Both the NMFTA and NMFC expect the changes to streamline workflows, enhance communication and visibility, and increase the overall satisfaction of everyone involved. “We estimate to move as many as 3,500 single-class items to 13 subcategories,” said Nate Ripke, director of commodity and standards development for NMFTA.

  • Standardized density scale for LTL freight when handling, stowability and liability issues are not present;
  • Unique identifiers for freight with special handling, stowability, or liability needs;
  • Condensed and modernized commodity listings; and
  • Improved usability of the ClassIT® classification tool.

Moving Forward

The days of stating my class is 50 for the last 15 years is over. This move will move most of the freight to density-based items. This means that data will be key. We must do everything in our power to get accurate dimensions and weight for each order. Getting accurate information will help with this change but will also help us get to the E-BOL which carriers are offering savings.

FedEx to Explore Divestment of FedEx Freight

FedEx continues to improve their operating ratio even though tunnage is down across the LTL industry. FedEx may be looking to achieve what UPS did by selling its LTL business and creating T-Force.

​

There are significant differences in these scenarios:

​

  1. FedEx is the largest LTL carrier today while at the time UPS sold off their LTL business they were the nations 6th carrier in volume and was only 40% of FedEx’s revenue at the time.
  2. UPS LTL was operating at 90.1% at the time they were sold and FedEx is operating at 80% today which as stated above is the 2nd best in the industry.


Whether FedEx decides to keep the LTL business or sell/spin off into a new business, the capacity will not go away. Unlike recent LTL carriers to close their doors, FedEx is not in this position and the FedEx trucks will continue to be used in the LTL industry.
 

Parcel

GRI Only Applies to 
"Base Transportation Changes"

9%

8%

6.9%

7%

5.9%

6%

5.9%

4.9%

4.9%

5%

4%

3%

2%

1%

0%

-1%

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Inflation PCT

Headlined GRI

"Headline" GRI 
only applies to "Base Transportation Charges"

Surcharges 
continue to surge 
at a higher rate than announced GRI 

​

AHS ^20%,

Oversize ^28% 

Resi ^7%

Minimum Charge increases vary by service 

​

Ground ^5.9% 

vs. 

Air ^8%)

IN THE NEWS

USPS Announces 25% increase for Parcel Select 

Fedex completes consolidation of operating companies

UPS focuses on core business after sale of brokerage business to RXO 

TOP INNOVATION TRENDS 2024

Vision Enablement for Operations

Use of camera and computer vision tools to enable workflows like inbound verification, outbound quality checks, SKU capture, inventory management, augmentation to allow humans to pick more accurately, etc.  Examples—Logistiview vision pick, Locatible camera vision inventory management, KARGO outbound quality check for pallets being exported, Rabot for packaging verification.

Vision Enablement for Operations

3

TOP TRENDS

Flexible Automation

1

Flexible Automation

1

Autonomous Operations

2

Vision Enablement for Operations

3

Digitization of Supply Chain Transactions

4

Significant focus on Safety/Security

5

REAL ESTATE

Industrial real estate expected to stabilize in 2024.

8%

Rent Growth

Net absorption is anticipated to remain on par with 2023 levels and taking rent  growth will moderate to 8%. 

1/2

Construction Deliveries

Construction deliveries will taper off by midyear and finish at half of 2023’s total. 

5%

Vacancy Rate

Early-year deliveries will raise the vacancy rate to 5% before a slight decline in the second half.

Low

New Development

New development will 
stay low due to tight lending, economic uncertainty, 
and an oversupply of large warehouses.

ABOUT KENCO

Kenco provides integrated logistics solutions that include distribution and fulfillment, comprehensive transportation management, material handling services, and information technology—all engineered for Operational Excellence. Building lasting customer relationships for over 70 years, our focus is on common sense solutions that drive uncommon value. Visit Kenco at KencoGroup.com.

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