CNBC Supply Chain Survey: The Prospect Of Freight Forwarders in 2024 Is Not Optimistic

According to yesterday's latest CNBC supply chain survey, the global shipping industry has fallen into a freight recession this year and challenging economic conditions will continue into 2024.

The CNBC supply chain survey was conducted between October 21 and October 31 among logistics executives who manage freight manufacturing orders and transportation, including executives from CH Robinson, SEKO Logistics, DHL Global Forwarding Americas, Kuehne + Nagel, OL USA and ITS Logistics. These companies have an in-depth understanding of the orders placed by shippers to manufacturing companies around the world because they pick up goods from ports and distribute products from warehouses to retailers.

This part of the trade pipeline allows investors to understand retail consumer expectations three to four months in advance based on the number of orders placed and the number of products shipped by truck drivers from warehouses to stores. It also provides information on freight rates and truck and rail traffic-the two main revenue drivers for shipping companies.

"We expect the peak season for trucking retail to be low," said Noah Hoffman, vice president of CH Robinson North American ground Transportation.

The freight recession has been tough for the industry as a whole and for companies that are not diversified enough to withstand the downturn, leading to the collapse of companies such as Convoy, a freight start-up backed by Jeff Bezos. According to Tank Transport, higher fuel costs and lower freight rates have caused a total of 31278 trucking companies to shut down or transfer their services to larger fleets.

The chief executive of Uber Freight cargo recently told CNBC that there would be a "new turning point" in the reshuffle of the freight industry because less diversified business models could not operate on a cost-effective basis.

Low freight prices and a decline in freight volume are one of the reasons Maersk, the global shipping leader, recently announced 10,000 job cuts.

Vincent Clerc, Maersk chief executive, said in a statement on results and layoffs on Friday: "our industry is facing a new normal, low demand, prices back to historical levels and inflationary pressures on our cost base."