Consider These Market Trends In 2024

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As we begin 2024, some market trends continue to take center stage over others. We’ll see a continuation of a loose market, an uptick in fraud and theft as well as increased effects of nearshing on the Southern border. Industry experts need to stay knowledgeable in order to make well-informed decisions in advance of the new year. 

Recent decline in U.S. economic growth has given way to a slow-moving transportation industry season. With inventory surplus comes less movement of cargo and that means a smaller number of trucks out on the road. That trend will continue well into 2024. Right now it’s a shipper’s market and it will be a while before it begins to level out. 

Another market trend we’re looking at is nearshoring developments, especially on the Southern border. For example, nearshoring is moving some manufacturing into Mexico versus the Pacific region, and that is changing the way products flow into the U.S. in a great way. I don’t see that being reversed. We’ll continue to see more companies go into nearshoring. In Laredo, Texas, specifically, volume is up roughly 45% from a year and a half ago and capacity is being shifted to the border to meet demand. It’s important for shippers to have inbound capacity so you can properly source the outbound capacity that’s needed to import those goods. That is a challenge and the industry will have an adjustment period before settling in. 

However, the main trend that I want to focus on as we begin 2024 is fraud and cargo theft in our industry. We’ve all recently heard about numerous fraud and cargo theft stories. There has been an uptick in this and it will continue into next year. We are looking into roughly 50-55% minimum increase of fraud from Q2 2022 to Q2 2023. And, in some lanes, activity is up well into a 200% fraud increase. What we’re seeing today seems to be a very sophisticated approach to fraudulent activity that is probably not U.S.-based. Not only does recent fraudulent activity in the industry include spoofing and tracking software, but also setting up fake domains for small and large carriers as well as fake domains for a third-party logistics company (3PL). Industry crimes are getting more and more complicated. Criminals create fake domains for email purposes that look almost identical to an actual 3PL’s domain and companies who do not take a second look will miss the small details and potentially fall victim to such crimes.

Bigger companies are getting better at spotting fraudulent activity but it’s the smaller mom and pop operators that need to be more vigilant. The small one to ten truck carriers may not have sophisticated cybersecurity practices in place to catch this kind of activity. That’s why they have to do their due diligence from where they’re getting a load. They need to always confirm it’s a 3PL that they’ve worked with or it’s a reputable 3PL with freight that’s actually being managed by that 3PL. The small 3PLs that may only cater to warehousing, receiving, and cross-docking, are the ones that need to stay current and educated on recent market developments and ensure there are standard operating procedures in place for every load. Small carriers and 3PLs need to have safeguards in place to prevent an erroneous load from shippers. In turn, shippers need to be involved and conduct due diligence on the personnel at a dock, warehouse or distribution center. Due diligence could be as simple as physically walking to the appropriate area to confirm the carrier picking up the load is the same as it appears on the bill of lading. It’s very easy to sign a rate confirmation and send it without paying attention but those extra few moments are the differentiators between being safe and falling victim to load scammers. Companies need to realize that it’s more beneficial and cost-effective to be proactive instead of reactive.

Industry movers need to keep these trends in mind as we progress into 2024. With a slower U.S. economy, nearshoring developments, and increase in fraud and cargo theft activity only shows that businesses have to be more vigilant and in-tune with market developments so that they can overcome incoming industry challenges head-on. 

 

Karl Fillhouer is the Vice President of Sales and Operations of Circle Logistics, a privately held third-party logistics company committed to delivering on three core promises to their customers: No Fail Service, Personalized Communication, and Innovative Solutions. Circle Logistics leverages its technology, industry experience, and employee ingenuity to develop industry-leading transportation solutions. For more information, visit https://circledelivers.com/