With 2024 rapidly coming to a close, we can see that the transportation industry had a solid year as a whole. Now having recovered from some of the tumultuous geopolitical situations that presented earlier in the year, as well as recent labor disputes, it looks to be a quieter finish to the year.

Ocean Freight

Both political and labor issues helped keep November container rates to the U.S. strong during a usually slow period. Routes from Asia to the U.S. have been elevated at over $5000 per forty-foot equivalent. This is probably due to the anticipation of tariff increases by the Trump administration when he takes office in January. President-elect Trump has hinted at tariffs on imports from China, Mexico, and Canada, which has caused some importers to bring in shipments earlier than planned.

As the value of U.S. imports increases, ocean carriers and terminal operators at East Coast ports have spent billions of dollars trying to accommodate the growing demands. However, recurring labor issues and uncertainties will have shippers using other ports on the West Coast or even Mexico.

Airfreight

Air cargo volumes were solid for October as traffic was up year over year for the fifteenth consecutive month. Statistics from IATA show that demand in cargo tonne km increased by almost 10% as compared to last year while capacity and cargo load factor also increased. The increase in capacity was largely due to the addition of international belly hold space. Cargo demand in North America was up 9.5% compared to 2023 and capacity was up by 5.8%. However, these numbers should be met with caution as incoming tariffs from the new administration in January could affect the air cargo industry in the coming months.

Ground Transportation

Less-than-truckload carrier Old Dominion Freight Line announced a 4.9% general increase which is in line with other carriers’ in the past few weeks and is counteracting the thought that the industry cannot pass through rate increases during an industrial recession. The timing and increase amount are in line with the carrier’s rate increase last year as well.

The Port of Long Beach was busy in October, moving almost 1 million containers that month. The Port of Los Angeles also beat records set during the pandemic during Q3. The increase was driven partially by importers diverting cargo to Southern California ports to avoid delays brought on by the East Coast and Gulf Coast labor disputes. Businesses are set to bring in larger volumes of goods through the end of the year, which is normally a quiet time for ports. Consumer demand and concerns about impending tariff and labor disputes will be behind the surge in volume on the West Coast for the rest of the year.

E-commerce

Even though many retailers moved up their sale windows to before the Thanksgiving holiday this year, consumers still wait to begin their shopping until after the holiday. Shoppers are expected to be careful about their spending this year. Although inflation has eased, and retailers are offering great deals, holiday budgets are tight for many households. This could have consequences for overall holiday sales numbers.

Black Friday, however, was very busy this year with the day hitting its peak around 2:00 PM EST. Cyber Monday appears to not be quite as important, with many shoppers using their phones and computers on Black Friday to make headway on their holiday lists. Online sales for Black Friday rose about 10 percent year over year. New this year–AI drove more than $14 billion in global online sales on Black Friday. Retailers that used generative artificial intelligence had a 9% higher conversion rate than those that did not use it. The toys category was a big winner on Black Friday with online sales up 622% as compared to average daily sales from last month. Thanksgiving Day online sales grew 5.5% according to Adobe.

The boost in online shopping came at the expense of in-person shopping. In-store traffic was down about 3% as compared to last year as retailers are making more goods available online. Economic issues such as higher grocery prices and cost of living may have impacted shoppers’ behaviors to look for deals online. Many retailers extended Black Friday deals to a larger shopping window which gave consumers more time to find the discounts they were looking for. Black Friday is no longer a single shopping event either online or in stores. It has become a larger sales experience.

Your Trusted Partner

At Red Arrow Logistics, our goal is to keep you informed and equipped with the latest industry trends, challenges, and opportunities. Whether you’re optimizing your supply chain, mitigating disruptions, or planning for future growth, we’re here to provide the expertise and solutions you need to succeed.

Red Arrow offers the scale and scope of services including air, ocean, and ground transportation to meet the budget and schedule requirements of the largest and smallest companies alike. If we can be of assistance, please email us at [email protected] or give us a call at 425-747-7914.