New Breakthrough ‘State of Transportation’ report cites various challenges for shippers and carriers in 2024

The new “State of Transportation” report issued today by Green Bay, Wis.-based Breakthrough, a provider of fuel and freight solutions for shippers, addressed myriad components of freight transportation and logistics impacting shippers and carriers, including volatile weather, sustainability and emissions reduction, and over-the-road capacity, among others. 

The report findings were based on feedback from 500 transportation stakeholders, including 350 shippers and 150 carriers, throughout the United States, from January 2 through January 8. This is the second annual edition of the report. 

Weather impact

The report found that the top transportation challenge in 2024 is extreme weather events, including things like the ongoing Panama Canal drought, intensifying winter weather across the United States, unprecedented flooding from atmospheric rivers in California, and an active hurricane season. Breakthrough found that 39% of respondents pointed to extreme weather events as the top challenge in 2024.

Breakthrough COO Jenny Vander Zanden said it was somewhat surprising that extreme weather events were the top transportation challenge.

“As supply and demand get more into equilibrium, we are starting to see more of a new normal in operations,” she said. “These weather disruptions are highlighting these moments where you are not in control anymore. It reinforces these moments where the unknown creates a need for visibility. And disruptions, whether they are weather- or event-driven and requires that need for visibility and being one step ahead and having the right tools to navigate changing networks and environments.”

Capacity outlook 

Freight market contraction was the next top challenge, as cited by 36% of respondents. While shippers still have the upper hand, in terms of being able to secure capacity, that is starting to shift, with 80% of respondents indicating that the capacity market will tighten, in tandem with rates rising over the course of 2024.

As for the timing, though, that varied, with 40% indicating that capacity tightening will occur over the first half of this year and the other 40% noting it will hold off until the second half of the year.

Vander Zanden explained that based on Breakthrough’s data, volume was down 4.8% annually in March, with that tally starting to tighten, but she added that since January volume is up a collective 5%, serving as a sign that conditions are heading back to the baseline.

“For the last two years demand has pretty much been consistently down, and inventories were depleted,” she said. “We're starting to see that inventory depletion and things get back into that next cycle or phase. Consumers have been stretched for buying. But I think that sentiment that's growing for increased demand, with both inventories and sentiment, is that those underpinnings are starting to show.”

Sustainability

Sustainability was another major theme of the report, with 50% of surveyed shippers stating they are focused on evaluating the potential emissions impact of alternative energies and 42% planning to minimize the distance traveled and 43% planning to assess the cost and availability of transitioning select lanes to alternative energy. What’s more, on the carrier side, Breakthrough found that 46% plan to implement fuel-efficient technologies in their vehicles, with 45% planning for regular vehicle maintenance to optimize vehicle performance.

This data highlights how there are multiple ways for shippers to approach sustainability through things like carrier selection, mode selection, reducing empty miles, and alternative energies, according to Vander Zanden.

“We are seeing strength in shippers wanting to reduce their overall emissions, but I think everybody is using different levers to be able to do that,” she said. “While only 50% are looking at alternative energies, I would expect this to be some subset of market leaders, not everybody. Until there's more being in the evaluation, being in the pilots, or some alternative energies, it's not easy to get your hands on those vehicles in full Class 8 trucking. You might see it in some of the smaller vehicle types. For Class 8’s, there is certainly a desire to get a truck to move freight in that way, but a lot of them are being used more in yards and for shorter length-of-hauls.”

Relationships matter

Establishing relationships with new partners was viewed as a top goal in 2024 by 51% of surveyed shippers and carriers unlike 2023, when 70% of respondents viewed strengthening mutually beneficial transportation contracts with current partners.

Breakthrough attributed the shift to establishing relationships with new partners is due to shippers seeing new opportunities to fortify their networks against future challenges while the capacity market remains favorable. And it added that helps to confirm the need to search for new partners to help “ride out the next wave of change,” amid an already hectic 2024, as evidenced by things like volatile weather events, 2024 being an election year, and ongoing M&A activity, too, with the report seeing carrier consolidation as a positive trend with many benefits, as 38% cited increased efficiency and more streamlined operations, 35% pointed to more stable pricing, and 32% said there is improved service quality.

“Every shipper gets phone calls from people that are soliciting their business,” said Vander Zanden. “I think belief is that a shipper driven strategy where they're using data to be able to identify those partners and relationships that best fit their networks is a strategy that has a lot of value. A lot of those phone calls are being made, with a focus on doing business together, but how do [shippers] find the carriers that are naturally landing in their market and the right partners to fit their network. The reality is many shipper networks are changing and evolving. We're seeing that through their networks transforming, whether it be new modes of transportation, new facilities, and port changing. Taking a look at the tools and the ways and capabilities that you're finding those partners, as opposed to kind of hoping that they're going to come to you, is a significant shift that the industry needs, where shippers can drive that conversation to say ‘I'd like you to participate in my network because you're a good fit for these reasons.’ And I think having that strategy that's data based and driving it makes a lot of sense.”