Freight Industry Forecast for 2023: Adaptable Strategies Will Win in Trucking Recession
The freight and logistics industry is built on innovation—from the steam engine to the forklift to drones and robots. Today, with volatile markets and supply chains becoming the norm and customer expectations rising, the industry will need to innovate more than ever. Thankfully, many of us are ready. Let’s look forward to what’s ahead in 2023.
1. Continued reduced freight volume
The past few years have seen a global pandemic, supply chain disruptions, and inflation affecting consumer spending. Reduced volume in the freight industry is driving down spot rates, while contract truckload rates are slightly up. Class 8 Net Tractor Orders provide a silver lining for carriers, up 126.9% year-over-year in Q4 2022. Flock Freight COO Chris Pickett says, “We suspected we might see something like this as OEMs reopened their order books once supply disruptions were resolved.”
What this means for shippers
It’s likely to remain a shippers’ market well into 2023, with low spot rates and a forecasted drop in contract rates, too. It’s a good time to expand your carrier network and lock in these lower rates while you can.
What this means for carriers
While Class 8 orders are rebounding, carriers can also expect continued high fuel prices and lower profits in 2023. Because of this, look for opportunities to earn more on every load, especially with backhauls and shared truckloads (STL).
2. Market growth for 3PLs
Most businesses in the freight and logistics industry work with third-party logistics partners, or 3PLs. The recent uncertainty in the markets could be contributing to skyrocketing growth for these partners as businesses search for new efficiencies and cost savings. The global 3PL market size is expected to expand at an annual growth rate of 8.6% from 2022 to 2030.
What this means for shippers
Shippers are in the driver’s seat of this trend, but too much demand could create an unfavorable market. Still, 2023 will be a good time for you to reevaluate your current 3PL or begin new partnerships.
What this means for carriers
Carriers can get in on this trend by working with 3PLs that offer shipping and receiving services. Some 3PLs work with preferred carriers, while others compare costs on a regular basis.
3. More adaptable logistics strategies
Flock Freight Founder and CEO, Oren Zaslansky, expects continued disruptions in the freight industry in 2023. Both shippers and carriers will need to adopt “elastic logistics,” or the ability to quickly respond to fluctuating supply and demand.
What this means for shippers
Shippers can leverage Flock Freight’s tech-driven freight shipping to stay agile. With Flock, you have multiple options for the same size shipment, so you can choose the optimal freight mode for your needs.
What this means for carriers
Carriers can earn up to 20% more by hauling shared truckloads (STL) through Flock, which allow you to maximize trailer space to quickly adapt to trucking recessions and other changes in the freight industry.
4. Consumer emphasis on speed and quality
There’s no doubt that the “Amazon Effect” will influence the freight and logistics industry well into 2023 and beyond. Customers have higher expectations than ever, with 76% saying that a negative delivery experience affects whether they would return to that company.
What this means for shippers
Shippers will need partners that can help them keep customers happy by delivering freight on-time and damage-free. Shipping via Flock Freight’s shared truckload helps you deliver on-time 30% more often and 99.8% damage-free.
What this means for carriers
Carriers with higher OTIF and lower claims rates will draw more business from shippers striving to keep their customers happy. Flock’s terminal-free shared truckloads could help you avoid delays and out-of-route mileage—so you can deliver more loads and keep earning.
5. Rise in automation
In today’s freight industry, robots pick and pack at warehouses. Advanced tracking systems keep teams updated in real-time. Big data informs load and route optimization. Drones perform inventory management. Autonomous trucking could be the future. And both shippers and carriers will see the benefits.
What this means for shippers
Shippers are likely to discover cost savings and new efficiencies in 2023 as they integrate automated technology or partner with those who do. You can leverage this trend to get ahead of the competition.
What this means for carriers
Automation benefits carriers, too, allowing you to accurately track shipments and make better decisions. It may even drive trucks in the future. Smart carriers will look into leveraging the latest technology to increase efficiency and drive down costs.
6. Emphasis on environmental impact
New environmental regulations are making their way to the freight industry: In December 2022, the Environmental Protection Agency (EPA) strengthened limits on nitrogen oxide emissions for tractor-trailers and other trucks. Consumers care, too: 68% say they’re willing to pay more for sustainable products.
What this means for shippers
The green revolution is driven by consumers, but it means that shippers are increasingly concerned with environmental, social, and corporate governance (ESG). Recyclable packaging, carbon neutral deliveries, and other sustainable shipping initiatives can be differentiators that help you win customers in competitive spaces.
What this means for carriers
Low-emissions vehicles will be the future: truck manufacturers must cut nitrous oxide emissions from new models starting in 2027. In the volatile market of 2023, services like shared truckload could make carriers stand out when it comes to sustainability—and help them secure contracts.
How Flock Freight can support you in 2023
The freight and logistics industry has been on a rollercoaster ride that is likely to continue into 2023. Shippers and carriers alike will need to remain agile and consider new solutions in order to stay ahead of the curve. Flock Freight, which was named to the 2022 CNBC Disruptor 50 list, is one such solution. Our patented technology pools freight shipments at scale into shared truckloads. The result? Shippers save money, carriers earn more money, and goods are delivered to happy customers on-time, damage-free and with fewer emissions. Join the Flock today and see how we can help your business thrive in 2023.
