Axle Monthly Update - July 2024

Key Trends

• Hurricane Beryl starts off the season in the Caribbean
• New and Revocations of Authority stay in line in the latest reading
• Rate forecast and improved fuel costs continue to strengthen trucking conditions

Hurricane Beryl takes aim on the Caribbean and the Gulf

Hurricane warnings are in place across Jamaica, the Cayman Islands, and parts of Haiti as Hurricane Beryl makes its way across the Caribbean. Beryl is the first hurricane to develop into a Category 5 storm this into the season, and it did so quickly. The storm moved from a tropical depression to a major hurricane in just 42 hours, the first storm to do so before September.

The National Oceanic and Atmospheric Administration predicted a well above average hurricane season, with between 17 and 25 named storms. Hurricanes have the potential to cause significant disruption in the freight market. While we are entering the season with abundant supply which will help limit shipper impacts, make sure to speak with your Logistics Consultant about how storms could impact your supply chain specifically.

Supply Update

The Federal Motor Carrier Safety Administration revoked 5,509 carriers’ authority while granting 5,202 new authorities to carriers, resulting in a net drop of 307 carriers for the month of May. As mentioned last month, with a net 92k carriers added since the COVID lockdown, we should expect excess carrier supply to continue until we see either larger drops in authority or significant upticks in demand.

Demand Update

The food and packaged goods segment experienced slightly lower demand projections in the latest FTR update, bringing the 2024 forecast for dry van loadings down to 1.9% growth y/y vs 2.1% previously. Overall demand patterns are very close to 2023, indicating a potential return to normal patterns.

Rate Update

Spot Rates showed continued strength through June, as is typical for the season. Spot Rates are now showing about a 6% gain since the start of May for the Dry Van segment.

Contract rates continued be flat as we closed out the first half of the year. Spot Rates are a leading indicator of Contract and could provide insight into the direction of rates obtained through pricing efforts in the latter half of the year. FTR predicts total truck rates to increase 3.5% in 2025 vs 2024, with many of those costs being procured during rating events the latter half of this year.

Slightly stronger forecasts in truckload rates combined with a sustained drop in diesel prices resulted in much more favorable conditions for carriers. Diesel prices fell to a national average of $3.658 on 6/10/24 (the lowest since 01/10/2022) before slightly climbing moving into the July 4th holiday week. As mentioned previously, it appears that normal seasonality has returned to the market. Shipper favorable conditions are likely to continue through the Labor Day holiday, before another round of seasonal tightening takes hold.

Our Team

Axle Logistics' Annual Summer Jam was an unforgettable event with teammates and their families enjoying unique animal encounters and an exclusive Zoo Knoxville tour, making it a night to remember.

#AxleImpact

Big shout out to the Boys & Girls Clubs of the Tennessee Valley, our June Community Spotlight!

A huge thank you for welcoming our 2024 interns for the annual Summer Kickoff party and giving them a tour of your incredible facilities. Your mission to enable all young people, to reach their full potential as productive, caring, responsible citizens is truly inspiring. Your impact on our community is deeply appreciated, and we are grateful for your partnership!

Did you know...

Did you know that the logistics industry is responsible for transporting over 54 million tons of goods every day in the United States alone? This essential sector ensures that everything from everyday consumer products to critical medical supplies reaches its destination efficiently and on time.