Things to look out for
The future isn’t etched in stone, and though Croke has analyzed the market and consulted with other industry experts, he advises caution. There is always the possibility of additional factors coming onto the scene that could heavily impact the trucking industry.
One factor Croke said to watch out for is the Houthi rebel attacks on ships in the Red Sea that impact global trade. Roughly 12% of the world’s trade passes through the Suez Canal, including oil and natural gas. With the rebel attacks on ships taking this passage, shipping companies have rerouted their ships, extending trips and causing delays in the movement of goods. Croke said this could impact the price of oil here in the U.S.
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Another factor that could impact the trucking industry is the drought in the Panama Canal. The drought has affected trade for several months, with canal authorities allowing the passage of fewer ships than its typical capacity. By February, it’s expected that only 18 ships will be allowed passage per day compared to its typical capacity of 36 to 38 ships per day. Authorities are also limiting the weight on the ships that pass through the canal, causing shippers to decrease the amount of cargo on each ship, according to Fortune.
Finally, Croke said the rumors of labor strikes at ports on the East Coast are another factor to watch. At a conference in Nashville this past November, the leader of the International Longshoremen’s Association, the maritime workers union for 70,000 longshoremen on the Atlantic and Gulf Coast, warned the ILA to prepare for a strike in October of 2024 if “a new agreement is not reached by September 30,” according to a press release.
These three factors, Croke said, could lead to a shift in shippers sending their goods from the East Coast to the West Coast. Shipping to the West Coast, specifically California, in 2024 will deliver its own set of problems. With California pioneering the shift to vehicle electrification and stricter emissions rules coming into play for drayage beginning January 1, Croke said it will be much more expensive to move goods in California. With the higher cost of these electric trucks, these regulations could further push smaller trucking companies out of business, Croke told FleetOwner.
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“What I can see happening is truckload capacity on the West Coast will be the sole domain of the large truckload carrier who can afford to buy these (electric) trucks and gobble up market share,” Croke told FleetOwner. “I think there’s something’s really interesting going to happen on the West Coast.”
Read more insight on 2024 from DAT’s 2024 Freight Focus Report its website.
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