5 Market Conditions Affecting Logistics - (Excerpt from "State of Logistics - Q1 2024")

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5 Market Conditions Affecting Logistics

1. Jobs

The big question hiring managers are asking is whether 2024 will be like 2022 (4.5 Million jobs added) or 2023 (2.7 Million). So far, January reported just over 350,000 jobs added, but one month of data isn’t enough to project an outcome for the year. Hopefully, we will know more by April or May which way things are headed(1).

2. Employment

February marked the third straight month that unemployment came in at 3.7%. Some financial experts believe that once unemployment dips below 5%, this opens an economy up to inefficiencies, output gaps, and even “disguised unemployment” or under-employed workers. Before we get too far into 2024, make sure you’ve correctly evaluated the skillsets of everyone in your organization and that their job matches that skill set(1).

3. Tax Breaks

In late January, the House passed a bill called “Tax Relief for American Families.” This bill would impact the investment opportunity for trucking companies by extending the allowance of a 100% bonus depreciation deduction for equipment purchased between late 2022 through 2026. Experts give it an “above average” chance for the bill to pass as it heads to the Senate with strong bipartisan support(2,4).

4. Consumers

Consumer Confidence is on par with the same level seen in the three years leading up to COVID. Simultaneously, the amount of projected new consumer debt was 90% less than expected over the holidays. Also, the personal saving rate is at a 12-month low (3.7%). Consumers may be historically “confident” about the future, but not spending money like that confidence would normally dictate. Consumers are paying off debt, investing, or holding their money(3,4).

5. Ports Change

Issues at the world’s largest canals are causing a shift toward more freight going to the ports in California. As more freight shifts back to the West Coast, intermodal firms on both coasts will need to adjust accordingly(5)."

End of page 4. Read the rest of the 15-page "State of Logistics" here.

Sources: 1. Bureau of Labor Statistics 2. Freightwaves 3. Govtrackus 4. The Conference Board 5. American Journal of Transportation