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Kelsea Ansfield

October Freight Update: Growing Optimism in the Supply Chain Landscape



At Gain Consulting, we’re always keeping our fingers on the pulse of the supply chain industry. In our latest review of the FreightWaves SONAR State of Freight webinar held on October 17, 2024, there’s a notable shift towards optimism in the market. Despite recent challenges like hurricanes and port strikes, discussions highlighted a potential turning point for the freight landscape.


Key Insights from the Webinar

  1. Possible Market Bottom Craig Fuller, CEO of SONAR, confidently stated, “We are at the bottom of the cycle.” The data supports this assertion, showing an upward trend in contract and spot rates. As discussed, the Outbound Tender Reject Index indicates “higher lows and higher highs,” signaling a stronger market this October compared to the same month last year.


  2. Capacity Changes As Fuller noted, the balance between demand and capacity is shifting. With some companies facing bankruptcy, capacity is being reduced, which could pave the way for a more favorable freight environment. He anticipates a robust freight market on the horizon.


  3. Impact of Tariffs The upcoming election has tariffs on the ballot, which could significantly impact supply chains. Fuller emphasized that even if future tariffs might be detrimental, in the short term, they could stimulate demand as businesses rush to import goods before potential increases. “You need something big to stimulate the market,” he stated, pointing to government action as a critical factor.


  4. Market Perceptions vs. RealityWhile some may feel a sense of malaise due to personal experiences, it’s essential to rely on data. The Inbound Ocean Shipments Index has returned to levels reminiscent of the post-COVID freight boom, contradicting assumptions that import levels wouldn’t rebound. Fuller’s perspective is clear: while anecdotal experiences matter, the data paints a different picture of a recovering market.


  5. Looking Ahead Post-Election Should Donald Trump return to the presidency, Fuller predicts a swift implementation of tariff policies, which could initially benefit trucking demand. Conversely, a victory for Kamala Harris might not result in significant changes to current trade policies. As businesses prepare for possible tariff adjustments, decisions around inventory and warehouse space will be crucial.


  6. Hurricane and Strike Updates Hurricane Milton’s impact was less severe than expected, and the recent ILA strike ended quickly, with minimal disruptions to freight operations. The industry will need to remain vigilant as negotiations around automation continue, but for now, the immediate financial concerns of workers seem to outweigh broader issues.


Conclusion

At Gain Consulting, we’re excited about the potential for growth in the freight market as we move towards the end of the year. Understanding these market dynamics is essential for navigating the complexities of the supply chain. As the situation evolves, we’ll continue to provide insights to help our clients make informed decisions in this changing landscape. Stay tuned for more updates.

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