January is here and resolutions abound. It’s the time of year for reflecting and making plans for a new year. Are you planning on shedding a few pounds? Hitting the gym more? Quitting smoking? Paying off your debts or boosting your income?
2024 affords everyone a clean slate to start anew and conquer their goals. Maybe you’re starting the year at a new trucking company. Maybe you have a renewed strategy to double your profit this year. Maybe you’re looking to get into your first lease.
Regardless of where you are in your personal and professional journey in 2024, a little background on what’s been happening in the trucking industry and what’s bound to happen in January 2024 and beyond will help you go further with those goals. To successfully move forward, it’s best to know where you were, where you are currently and where you’re going.
In this article, I’ll apply that to the trucking industry. I’ve been in the industry since 2007, so I’ve seen my fair share of January trucking markets. While we’ve experienced some challenges in the market in recent years, it’s nothing we haven’t seen before.
In this January update, you can expect to learn the following:
- A 2023 recap, highlighting notable industry news, freight rates and freight availability
- A look at January 2024 and beyond
- Tips for success in 2024
Forget that nonsense about “new year, new you.” Instead, take this 2024 insight and use it to build on what you learned in 2023.
Recapping the Trucking Industry in 2023
If I had to sum up the trucking industry in a nutshell last year, I’d say it wasn’t great. In fact, it was pretty messy and no one was exempt from feeling at least some of the consequences. Load counts were down, margins were down and profits were down as we anticipated an impending recession.
We saw a lot of carriers close, thousands of drivers give up their authority and other carriers and drivers completely readjust their running style to match market demands. In sum, it was a trying year for all of us.
We did see some seasonality increase the freight activity throughout the year but load counts were down overall. We saw load availability year over year drop by 31 percent while truck availability only dropped by 13 percent.
That’s where the major imbalance comes from. There was a drastic drop in load counts but not in driver availability. Some of this at the end of the year could be partially due to drivers taking vacation during the holiday and some could be due to them leaving the market. Drivers used to be able to run 100,000 miles per year and be successful. Now they have to run more, but it’s hard to find the freight.
Freight rates didn’t help the situation for drivers. The fourth quarter is traditionally the best shipping quarter of the year, but nothing particularly exciting happened. It turned out to be a false fourth quarter. National freight price averages underperformed across all freight types — from vans to reefers to flats.
Year over year, van rates dropped by 20 percent. We saw a lot of that happen in the first 12 fiscal weeks of the year and then the remainder of the year was stagnant.
Flatbed freight rates decreased by 12 percent with a majority of that happening later in the year. Summer was the worst for flatbed rates and we’ve yet to recover.
Reefer freight rates declined by 18 percent year over year. There was a slow decline all year.
A lot of companies just couldn’t keep up with the boom-and-bust cycles of the industry and either downsized, filed bankruptcy or closed altogether.
In July, Yellow Corp. filed for bankruptcy and ceased operations. Open for 99 years, they’d been struggling for years but the down market finally took them out. Convoy, a digital freight startup, also closed, as did Meadow Lark Transport and Twin Express Inc. Other companies reported major debt in Quarter 3 but they’re still hanging on.
Estes Express was the subject of a cyber attack in October, a warning to all that you need to make sure your systems are secure.
Here’s a list of the trucking companies and freight brokerages that closed in 2023.
While a lot of drivers gave up their authority, they didn’t leave the industry altogether — which means there’s still a high number of drivers in the industry impacting the ratio of loads posted to trucks.
Instead, they’ve fled to the protection of a trucking company rather than leaving trucking behind completely. This made it difficult for drivers trying to increase their productivity and run more miles to increase their earnings.
The Freight Outlook in January 2024
Thankfully, the outlook isn’t all bad in 2024. Economists are talking about 2024 with optimism. By the end of 2024, estimates show that we might not be at a full-fledged rebound, but rates may have increased by as much as 10 percent.
So, there’ll probably be a slow uptick, but experts are hoping the market will start turning around and balancing out by July.
Think of it this way:
You know when you’re driving to a big destination like a national park on a road trip and you see the first sign for it? You’re not at the exit, but you’re finally seeing the location pop up on destination signs with mile estimates.
You still need to drive a few more hours, get a park permit, get through security and calm the kids down in the back. But, you’re almost there.
That’s about where we’ll be in 2024. We’re getting a lot closer to a better freight market but we just aren’t there quite yet.
Quarter 1 is notoriously tough in the industry — with less freight moving and lower rates as we face the winter season — but spring may bring some bright spots. At the end of 2023, housing starts jumped to near-record levels — so we can hopefully expect high levels of building materials to ship in spring.
Winter is also when we see the highest rate of drivers exiting the industry or leaving behind their authorities. While there’s still a long way to go before supply and demand are balanced, this could open up some freight opportunities.
There are, however, still some unknowns. If the interest rates continue to drop, the economy will grow quickly. Big projects can boost freight. However, geopolitical influences can throw a wrench in plans easily and change the entire market. We’re also in an election year which usually causes fuel prices to rise. These are all things to consider and keep an eye on as you navigate the new year.
Navigating the 2024 Trucking Industry
In January, you can expect more of the same in 2024 as you did in 2023. You’ll want to keep that door closed and run as many miles (safely) as you can.
The best way to get through it is to run straight into the storm. Here at ATS, we call it “being the buffalo.” When you plow into the storm, you get through it a whole lot faster than if you were to run from it. It’s better to face it head-on and get through it.
The market will be slow in the winter months, so now might be the time you head home for some rest if you didn’t take time off during the holidays. If you do plan to go home, be smart about it by saving up in advance to cover your costs when you’re not on the road.
Keep an eye on the market to see where freight is hot. A lot of drivers want to go where it’s warm so they’re less willing to take loads into the Midwest and Northeast. Capitalize on that by being the driver that will take those loads. They’ll pay more, even if you do have to exercise extra caution on wintery roads.
Mind your budget closely and try to cut costs where you can by not idling excessively, minding your fuel expenses, going one or two miles below the posted speed limits, keeping up with maintenance and keeping safety at the top of your priority list.
Perseverance in 2024
In the ever-evolving landscape of the trucking industry, January 2024 presents itself as a pivotal point for reflection and strategic planning. Understanding where we’ve been in 2023 and foreseeing what lies ahead in 2024 and beyond provides a crucial compass for drivers like you navigating these challenging yet opportunistic times.
2023 was a tough year across the board. There are good and bad times in the trucking industry and, frankly, 2023 was bad. It tested who was and wasn’t a real trucker. Companies faced closures, bankruptcies and cyber threats, reshaping the industry's dynamics significantly.
As we step into January 2024, the horizon shows glimmers of hope. Economic forecasts hint at a gradual recovery, projecting potential rate increases by year-end. Much like nearing a destination on a road trip, signs of improvement appear on the horizon.
Resilience remains the cornerstone of success in 2024. Embracing the storms head-on, seizing opportunities where others might shy away and maintaining strict cost-cutting measures will be important strategies for survival.
The path ahead may hold challenges, but it also promises opportunities for those prepared to adapt and persevere in the dynamic landscape of the trucking industry.
For tips on perseverance, check out these tips from ATS drivers.