The Market Report: January 2023

As logistics and supply chains continue to experience volatility, staying on top of the latest insights has become critical. Consumer spending has been losing steam for some time, capacity levels continue to compress and contract, and diesel prices dropped sharply last month. The impact of these changes will take root as we enter 2023. All these factors give logistics buyers a chance to take advantage of this month's insights and review their goals to find value-driven cost savings and help avoid potential problems.

Summary:

1. Consumer pending losing steam
2. Capacity levels continue to contract
3. Diesel prices fell sharply last month

The Insights:

Spot capacity is in a tough place. This means there are not as many new drivers starting up. Employment levels remain high for truckers, but it looks like many have left smaller fleets to join bigger ones. This means there are the same number of drivers but less available space overall.

In November, the amount of cargo being transported is following an up-and-down pattern, and increased by 0.8% year-over-year, and by 2.5% month-over-month. This means that it is increasing a little bit every year, but decreasing a lot every month. This tells us something about how much is shipping around the country.

In December there was a bigger decrease in diesel prices with the average cost of diesel fuel dropped by 10%. This is because the cost of crude oil went down and there was more distillate available.

Consumers have not been confident about spending money recently. This means they were worried about buying things and didn't buy as much. In December, this changed and people started buying things again likely due to the holiday season. Some of the places that felt this change the most was in the automotive industry. We are hopeful that this trend will continue but with higher credit usage up and saving rates down, low confidence levels of are expected to continue.

The manufacturing sector is still not doing well. The ISM index fell during December, which means that things might get worse for manufacturers. They are already facing reduced production, and now they have to worry about the economy, too.

The housing market is not doing well right now. This could be because there are not enough permits and mortgage rates are going up.

Payroll employment remains strong, but not as many people are working. This could be a problem in the coming months, even though unemployment held at 3.7%.

Questions? Got any insights I missed? Need to talk shop about something going on with your logistics? Share below in the comments — I’d love to help and hear them!