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Navigating the Storm: A Retrospective on Logistics & Freight Challenges


Denis Wolowiecki, CAPS Research, Executive Managing Director

Global freight has increasingly become a focal point as it faces mounting risks and complexities. Recognizing this, CAPS Research is investing more time and research into the area of logistics and freight to build out metrics and best practices. This is critical as our data shows that more and more supply management executives have responsibility in this area. To better understand the role and importance of logistics and freight, we must take a deeper, yet retrospective glance at its significance in our profession.

A Return to “Normal” Was Short-Lived

Supply chain professionals faced numerous challenges from late 2020 to early 2023, due to the global pandemic, as they fought to regain some degree of supply availability, schedule reliability, and predictable transportation rates. 

Ocean freight rates skyrocketed to several multiples of pre-pandemic levels as demand levels surged in the post-pandemic recovery.  Major US ports were overwhelmed with volumes of cargo and container ships were anchoring off-shore, waiting for an opportunity to dock and unload.  Trucking companies were pressed to keep up with an excess of container volumes – both inbound cargo and outbound empties.

Logistics and freight issues somewhat stabilized in the latter half of 2023, as ocean rates returned to previous lows, port congestions cleared, and trucking capacity exceeded demand and drove low freight rates for the benefit of shippers.  It proved too great a strain for Yellow Freight, leading them to declare bankruptcy, taking a major Less-than-truckload (LTL) carrier out of the market.  Numerous small and private carriers also folded and dropped out of the market.  Still, trucking capacity remained high and truck rates remained low. 

Supply chain unpredictability struck ocean freight in early 2023 as low rainfall impacted the Panama Canal lock system, "limiting the locks' capacity to accommodate large container ships and other vessels".

Geopolitical Turmoil

Throughput of ships declined steadily throughout 2023 and continuing into 2024.  In late 2023, turmoil in the Middle East impacted the Red Sea shipping lanes routing through the Suez Canal.  Houthi rebel forces adapted missiles and drones to attack ships, causing most global carriers to divert their ships away from the region.  The net effect of routing changes and alterations to sailing dates has been a 2 to 3 week increase in transit times for global freight moving between continents.  That increased transit time comes at greater costs – for ship operations, crews, fuel, and insurance.  More time at sea coupled with global turmoil equates to greater risk and higher cost.  Ocean freight rates escalated significantly – again.

The longer transit times created another impact – higher inventory levels and higher inventory costs. As the world was beginning to regain control over inventories after the 'buffering up' during and after the pandemic, the challenges involved in moving through longer global trade lanes and facing (again) uncertainty of port congestion and delays has tended to push supply chain managers to start “buffering up” - again.

A Bright Spot for US Customers

There is abundant capacity of trucks and railroads for moving the freight once it reaches US shores.  The market continues to have more capacity than demand and that is keeping truck and rail rates relatively low for shippers.  However, the high capacity and low rates are a double-edged sword.  The stress on operators remains high and the conditions continue to force capacity to exit the market.  Additionally, the quality and reliability of service is a concern as some customers “get what they pay for” with low-end operators.

The latter half of 2024 may bring improved balance in the US domestic freight markets, but time will tell.  Consumer demand for goods is continuing to propel freight demand in some market segments, and there is hope for improved industrial demand.  It will depend on the strength of the economy and consumer sentiment as the US moves toward the November 2024 elections.


CAPS is a B2B nonprofit research center serving supply management leaders at Fortune 1000

companies. CAPS Research inspires leaders with profound discovery and executable strategies to

shape the future of supply management. Research reveals the destination, benchmarking charts

the course, and networking creates the path to transformation. All CAPS offerings are sales-free,

bias-free, and practitioner-driven. CAPS was established in 1986 at the W. P. Carey School of

Business at Arizona State University in partnership with the Institute for Supply Management.

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CAPS Research

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