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Freight market update: Q1 – March 2024

February 7, 2024 / US
Freight market update: Q1 – March 2024

March 2024 freight market update: Key insights

Inflation surprised to the upside in February for the second month in a row, indicating that the Fed’s objective to bring it down to 2% might prove harder than expected. Meanwhile, the unemployment rate rose to its highest level since January 2022. Following an abysmal January, retail sales recovered slightly in February, but remained 0.5% below December’s level. 

In freight, the spot market softened significantly in February as supply chains recovered from January’s winter storms, where truckload demand plunged across all three major sectors: retail, manufacturing, and wholesale. On the positive side, February’s imports rose on a y/y basis, exceeding 2021 levels for the first time since July 2022. For-hire trucking employment remained flat last month, but employment in the long-distance truckload sector shed 1.5K jobs, as excess capacity continued to exit the market, slowly but surely.  Read the detailed report here.


Q1 2024 freight market update: Key insights and recommendations for shippers and carriers

If we had to choose one word to summarize the current state of the freight market, it’s stability. Following a busy holiday shipping season, consumer spending remains resilient and inventories are normalizing.

When the market is stable, there’s no better time to fine-tune strategies and ensure your logistics program is ready to navigate future challenges. Our latest quarterly market update shares data and insights from our experts around the impacts of leading trends in freight today—these include the impacts of nearshoring and cargo theft in Mexico, how Yellow’s exit influences the LTL space for the long term, and how the Red Sea cargo crisis is altering global supply chains. Read on for a snapshot of what to expect and how to prepare: 

U.S. trucking: FTL demand recovers and LTL volume spreads out evenly

Demand indicators in the U.S. FTL market are generally positive. Truckload demand grew by 0.3% in Q4 2023 thanks to rising consumer spending on goods, while supply increased 0.2%. The gap between supply and demand is still historically high, but the increase in demand we’ve seen has closed 30% of this gap. 

U.S. spot and contract rates are also rising. While rates normally dip in Q1 due to seasonal headwinds, we’ve seen a counter-seasonal increase in rates for van and flatbed, indicating that the truckload market has already passed the bottom.

On the LTL front, Yellow’s shutdown last summer brought uncertainty to the market, as volume was set to be absorbed by competitors. Now, we’re seeing the long-term effects of the company’s exit: Overall, there was little disruption thanks to excess supply in the LTL market.

A majority of Yellow’s volume appears to have been dispersed evenly among carriers, as no one’s market share increased substantially over others. Due to Yellow’s bankruptcy, LTL carriers’ tonnage is down less than the market. Despite the volume sharing, LTL carriers still have varying degrees of excess capacity available, ranging from 5-20%​. 

LTL carriers remain price-disciplined despite reduced tonnage levels—and their revenue has stabilized due to less demand and more competitive pricing. When we analyzed contractual renewals, we found the rate to be in the 3-7% range, and that range is set to increase by the same amount of percentage points throughout 2024.

Our recommendations:

  • Take advantage of today’s soft FTL market by reimagining and expanding your procurement strategy. We’re seeing shippers use procurement software to bid across their entire network versus a few select lanes, as well as more modeling around data sets including lane hierarchy, bid structure, and accuracy of volumes.
  • Make the most of LTL shipping by working with your managed transportation service provider to improve network and carrier collaboration, and pricing strategies. 
  • Keep up with the latest developments in LTL shipping automation by following the Digital LTL Council, a network of LTL carriers, and logistics and technology providers.

What’s impacting Mexico: From cargo theft to a presidential election

2023 was a pivotal year for cross-border transportation. Mexico ranked as the top U.S. trading partner in 2023, with industries like transportation and furniture driving a 3% year-over-year increase in total trade of goods. Overall, the Mexico market has remained soft, with carriers prioritizing long-term commitments at competitive rates for shippers. 

However, conditions will likely shift over the next 12 months. The upcoming presidential election in June will likely create headwinds for shippers, out of Mexico. Expect the event to put pressure on the Mexican peso and impact potential foreign direct investment (FDI), which could cause an increase in transport rates for shippers. 

Meanwhile, alongside broader increases in cargo theft in the U.S., truck theft is also becoming more rampant in Mexico. Camara Nacional del Autotransporte de Carga (CANACAR) reported 13,000 incidents of theft on highways in 2023, a 5% year-over-year increase. And carriers face higher insurance policy costs due to the spike in crime. 

Finally, we can’t spotlight Mexico without acknowledging the nearshoring boom, which will continue to positively impact the Mexican economy and keep the market in shippers’ favor. The Secretary of Economy identified 378 announcements of investment, amounting to $106 billion (U.S.) and 235,000 new direct employment over the next few years. This marks a 21% increase in FDI from last year, with investments from major companies including Walmart and Heineken. 

Our recommendations:

  • Combat thieves and keep drivers safe by implementing safety procedures such as only transporting goods during the daylight in cargo theft hotspots.
  • Invest in a TMS with fraud-prevention technology: solutions include real-time shipment tracking to catch suspicious activity, and built-in automation to verify carriers with unique identifying information. 
  • Budget accordingly to leverage both the nearshoring boom’s potential capacity crunches and post-election economic disruption. 

The Red Sea and Panama Canal cargo crises causes headaches for ocean carriers

Ocean transport has experienced major disruption over the past few months. A drought in the Panama Canal has slowed cargo travel by nearly 40%. And, in the Red Sea—home to 12% of annual global trade—Yemen’s Houthi rebel group has attacked cargo ships, forcing shippers to take alternate routes

The Red Sea crisis has sparked major shippers including Walmart and Adidas to redirect vessels around the Cape of Good Hope instead of traveling through the Red Sea and the Suez Canal—a route ships traditionally take when traveling from Asia to USEC ports. 

These detours are creating major delays of anywhere from 10 to 14 days across global supply chains, meaning companies have to account for buying extra fuel, adjust their delivery timelines, and identify new ports of call. 

Our recommendations:

  • Invest in real-time supply chain visibility, which will give you insight into which alternative modes of transit and ports of delivery will help you get your goods to their final destination on time—and at the lowest cost. 
  • Build in new approaches that address ocean disruption for the long term: including nearshoring and investing in multiple manufacturing partners so you’re not relying on getting goods from a single destination.


These are just a few of the findings from our new report. For a comprehensive outlook of what logistics teams can expect this quarter, see our full Q1 Market Update and Outlook Report

*All data is generated by Uber Freight internal indices using a weighted combination of truck and driver availability for supply, and manufacturing output, goods consumption, imports and exports for demand.

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