Heading into 2024 there are glimpses of optimism on the horizon. While supply chains continue to reshape and respond to changes in global trade flows and networks, and truckload transportation in the U.S. remains in a recession driven in part by overcapacity and rightsizing of inventories, positive outlooks are prevalent. In fact, data published by Adrian Gonzalez at Talking Logistics calls this out directly:

“Despite all the challenges facing the industry -- labor shortage, cyber attacks, geopolitical risks, sustainability regulations, and much more -- most of our Indago members are ‘Optimistic’ (65%) or ‘Very Optimistic’ (4%) about the year ahead from a supply chain management perspective; only 4% said they were ‘Pessimistic.’”

This is somewhat surprising given that we’re still emerging from the headwinds of inflation, Covid, and shifts in demand from products to services, to name a few major challenges. Here’s a look at what’s top of mind for other leaders and organizations as we move into the new year.

Long Road Ahead

CEO of C.H. Robinson David Bozeman seeschallenges for at least the first half of 2024, particularly North Americantruckload. According to Bozeman, wholesale inventory levels are still elevatedand the “over supply of capacity this late in the current downcycle” is notwhat he’d expected.

Room For Improvement in 2024

The 32nd annual study of logistics andtransportation trends published by SupplyChain24/7 points to a core challengefacing carriers and brokers in the coming year: how to improve operationalefficiency to counter the labor shortage and rising costs.  Adding fuel to this fire is a growingemphasis on customer service over pure cost. One major callout from the report:technology adoption is essential for survival. Brokers and carriers thatoverlook investment in innovation risk losing their customers.  

Tighter Handle

Government agencies are taking a more hands-on approach to supply chain, a growing trend that will continue in 2024. The U.S. government recently announced a major initiative to ramp up the Freight Logistics Optimization Works (FLOW) program, designed to “address supply chain issues by getting truckers, shippers, wholesalers, retailers and other businesses to share information. ”White House deputy National Economic Council director Celeste Drake said the program has evolved its goal of "answering the very simple question of 'Where's my stuff?' to 'How do we create a forward-looking integrated picture of the supply chain condition in the U.S.?'" A similar initiative is taking place in India, where a National Digital Freight Exchange has been established with more than 20 major global brands working with a supply side ecosystem including dedicated trucking capacity to eliminate inefficiency, delays, uncertainty, costs and empty miles.

Profound Transformation Ahead

KPMG indicates in a report that the world of supply chain is poised for a digital shake-up, particularly as it relates to data innovation and AI. “As west and on the brink of 2024, the supply chain landscape is on the cusp of profound transformation. AI and other advanced technologies are quickly reshaping the very core of supply chain management. KPMG professionals believe organizations with the right approach and culture can harness these seismic shifts.”

Monetary Policy

The Federal Reserve and other central banks are signaling rate cuts in 2024 that will have profound impact across the economy and supply chains. Ray Wang of Constellation Research suggests that lower rates combined with the drought of IPOs over the past couple of years will make 2024 “an amazing market for IPOs”. He adds, “AI, FinTech, Cloud software, and Elon Musk are potentially the big winners. So long, interest rates come down, and we stick the soft landing, we are ready.”