2024 Freight Market Trends: Leveraging Nearshoring

2023 was a challenging year for many in the freight transportation industry, with carriers and brokers highly impacted by the soft market. As we look ahead to 2024, we at Rapido Solutions Group are sharing our insights and recommendations to help businesses in the logistics industry improve their operations and balance their spending. We will outline some great ways to improve operational efficiency in 2024, including the benefits of nearshoring.

Freight Market: A Look Back

In short, we’ve been facing a soft market in 2023, characterized by excess transportation capacity compared to demand. According to FreightWaves SONAR’s outbound tender rejection index (OTRI), the market bottomed on May 14 but has slowly improved for carriers. OTRI utilizes the percent of carrier-rejected freight to measure supply and demand. While several factors have led to the recent state of the market, high inventories and a decline in consumer spending have continued to hinder the industry.

2024 Logistics Industry Trends: Rapido’s Outlook

There has been debate over what 2024 will hold for the freight market, though many experts anticipate a steady improvement throughout the year. At Rapido, we forecast a muted turnaround that will pick up later in the year. As capacity continues to leave the market, contract rates will stay relatively flat while spot rates will begin to bounce back.

What’s Most Important in 2024?

Despite indications of market improvements in 2024, the year is expected to pose continued challenges for brokerages without a swift or immediate rebound. Ongoing issues — such as low volumes, diminished profit margins, heightened competition, fluctuating rates, and operational efficiency pressures — continue from the challenges faced throughout 2023. While improving margins remains a primary focus today, priorities will evolve as the freight market gradually improves later in the year. Brokers should prepare to scale up operations to meet an increase in volumes as the market shifts.

Leveraging Nearshoring to Improve Operational Efficiency  

In the current volatile market and with inevitable uncertainty in the future, adaptability is a vital characteristic for companies within the freight industry. One effective strategy to encourage adaptability is nearshoring. At Rapido, we connect North American logistics and supply chain organizations with the best nearshore talent to scale efficiently and operate effectively. We know logistics and people, and we’re driven by an inside knowledge of how to recruit and hire within the logistics industry.

The leadership team at Rapido boasts years of experience at some of the leading third-party logistics companies in the U.S. We’ve been in your shoes, so we understand the importance of adapting your priorities during market cycles. Right now, it’s crucial to streamline costs and improve margins. As the market turns and competition peaks, you’ll need to hire and train your team quickly to meet the uptick in demand. At Rapido, we want to help normalize the cost and speed of hiring quality team members, no matter the state of the market.

Defining Your Strategy with Nearshoring in 2024

As we enter 2024, it’s essential to define your strategy for the year, articulating your goals and how you intend to meet them. Many brokerages can get caught up in the day-to-day operations — especially when navigating a challenging market — but it’s crucial to devote the time to be proactive rather than reactive.

Top Goals for 2024

At Rapido, we believe part of your strategy should be looking at how nearshoring can help reach important goals, such as:

Improve efficiency and margins

Improving your operational efficiencies to bolster margins is essential, especially in a tricky market. Embracing new technology, advanced data analytics, automation, and nearshoring can help streamline your operations. With nearshoring, you can tap into skilled talent pools at a lower cost — allowing you to do more with less without sacrificing service levels.

Adjust operations based on the market

As the market shifts, your priorities will likely shift from pure cost savings to ramping up operations. At Rapido, we can help you find skilled talent quickly, lowering the average time to hire from six months to four weeks. Our reps undergo extensive training to get them up to speed with the logistics industry and current market trends. In an ever-changing market, logistics professionals need to continue to watch market trends and prepare to adjust their strategy as needed.

Focus on strategic initiatives

When monotonous tasks (e.g., tracking shipments) bog down your team, there is little time left for strategic or sales-focused initiatives. Leveraging a nearshore team will allow you to keep up with your day-to-day operations while prioritizing activities that drive business growth.

Tracking Your Success

Once you’ve defined your goals, determining how you will track your success is just as important. Regarding nearshoring, you can utilize several key performance indicators (KPIs) to ensure your nearshore team is helping drive your success:

• Revenue per head: The average amount of revenue generated by each individual
• Loads per day per head: The average number of loads or shipments handled by an individual employee per day
• Time to hire: The time (in days, weeks, or months) it takes for a company to complete the hiring process (from initiating recruiting to onboarding new hire); this reflects the efficiency of the hiring process
• Ramp rate for new hires: How quickly new hires reach full productivity
• Attrition rate: Employee turnover rate; measures the percent of employees who leave the company over a specific period of time
• Salary and payroll vs. costs: Compares the total costs associated with salaries and payroll to the overall operating costs of the company

Partnering with Rapido

Rapido wants to be your partner in nearshoring. And we will go above and beyond to make you successful. With Rapido, you get a team of professionals trained and immersed in logistics by some of the most experienced logistics professionals in the industry. Rapido will help you scale and deliver a superior customer service experience with the full output you expect from your own teams. We’ll stand by your side as we all navigate whatever the freight market holds in 2024.

‍Reach out today to learn how Rapido can help you navigate the market in 2024 and beyond.