As the holiday season gears up, the freight market offers a mixed bag of trends and challenges for November 2024. From hurricane recovery to shifting demand patterns, businesses navigating logistics must remain agile. How will these factors impact trucking rates, capacity, and holiday logistics? Let’s break it down.

October’s Impact on November Trends

Hurricane Recovery and Volatility

Early October saw disruptions from East and Gulf port strikes compounded by back-to-back hurricanes. While these events caused short-term volatility, the freight market stabilized by late October. The recovery efforts continue but have minimal ongoing impact, setting the stage for a typical holiday season.

• Spot Market Trends: Spot postings surged in October, increasing 26.6% month-over-month and 20% year-over-year. This spike highlights the impact of natural disasters forcing contract freight into the spot market.
• Reefer Volatility: The reefer market faces significant volatility, with tender rejections reaching their highest levels since 2022. Seasonal demand for perishables could further amplify disruptions.

Trucking Employment and Capacity

Trucking employment declined for a second consecutive month in October, with 100 fewer jobs on a seasonally adjusted basis. This attrition reflects ongoing challenges in maintaining capacity amid low revenues. However, the holiday peak season provides temporary relief, slowing further declines.

Truckload Demand: Stable but Vulnerable

Seasonal Trends Resurface

Truckload demand has returned to seasonal patterns after disruptions in early October. Late October and early November witnessed a lull before Thanksgiving, aligning with typical trends.

• Steady Demand: Accepted load tenders, measured by the CLAV index, show stability heading into November. However, tighter supply conditions increase the market’s susceptibility to disruptions.
• Spot Market Shifts: Spot loadings surged due to hurricane-related contract rejections, emphasizing the market’s reactive nature during crises.

Holiday Peak Season Expectations

The holiday peak season promises higher demand, particularly for dry van and reefer equipment. This uptick in volume could pressure routing guides, especially as carriers prioritize profitable lanes.

Capacity Outlook: Challenges Ahead

Tightness Across Modes

Despite the market being oversupplied, October’s weather disruptions created localized tightness. This trend is expected to persist as the holidays approach.

• Dry Van Rejections: Rates of dry van tender rejections are climbing, diverging from last year’s trends. This signals potential routing guide disruptions during peak shipping weeks.
• Reefer Challenges: With reefer rejections surpassing 17.0 in early November, the market is at its most constrained since April 2022. Seasonal demand for perishables like cranberries and turkeys is driving this trend.

Load-to-Truck Ratios Rising

DAT reports an 18% rise in van load-to-truck ratios from September to October, with reefer ratios showing a 16% increase. These metrics highlight tightening conditions as demand intensifies.

Freight Rates: Seasonal Inflation

Spot and Contract Rates Diverge

Rates across all modes rose sharply following early October’s hurricanes. Dry van rates hover around $2.00 per mile, while reefer rates have climbed to $2.45 per mile. Both modes are expected to see further increases through Thanksgiving and Christmas.

• Spot Rates Leading the Charge: Spot rates for reefer equipment have surpassed $2.00 per mile, closing the gap with contract rates. This trend, combined with increased rejection rates, underscores the market’s vulnerability.
• Fuel Price Relief: Declining diesel prices provide carriers with some relief, potentially offsetting operational costs during peak demand.

Cross-Border Freight Updates

Canada

The end of strikes at Vancouver and Montreal ports has restored freight flows. However, the strong USD relative to CAD is squeezing margins for carriers tied to CAD-based contracts.

Mexico

Spot rates for cross-border freight are rising, signaling the end of a softer market cycle. Stable U.S. consumer demand and Mexico’s export strength, especially in the automotive and electronics sectors, support this trend.

Holiday Season Logistics: What to Watch

Supply and Demand Dynamics

Retailers are pulling freight forward to mitigate potential disruptions from new tariffs or resumed port strikes in January 2025. While this benefits near-term volumes, it may suppress demand in early 2025.

Regional Trends

• East Coast: Tightening conditions in New Jersey and increased seafood demand in the Northeast.
• Midwest: Seasonal demand for meat and cranberries constrains capacity in meatpacking regions.
• West Coast: Early signs of tightness in Arizona and California ahead of the holidays.

Key Takeaways for November 2024 Freight Market Update

1. Holiday Season Brings Volatility: Expect seasonal rate inflation and tight capacity, especially for reefer and dry van equipment.
2. Demand Stabilizes Post-Hurricanes: Market disruptions from October have normalized, but tighter conditions heighten vulnerability.
3. Cross-Border Freight Remains Critical: Rising spot rates in Mexico and improving port conditions in Canada shape cross-border logistics strategies.
4. Prepare for Reefer Challenges: Perishable goods will drive reefer market volatility, impacting routing guides and rates.
5. Long-Term Outlook: Sustained recovery remains unlikely until mid-2025, with the current holiday surge offering only temporary relief.

Conclusion

Navigating the November 2024 freight market requires a proactive approach to manage seasonal demand, rate volatility, and capacity challenges. Whether planning for cross-border logistics or anticipating reefer disruptions, staying informed is key to optimizing operations during this pivotal time.

Need expert logistics solutions? C&C Logistics is here to help you tackle these challenges and streamline your shipping needs. Reach out today!