2024 Freight Forecast: A Broker’s Guide to Success
As we start a new year, the freight industry remains in a soft market with a surplus of truck drivers and less demand for freight. The volume of trucks has greatly outweighed the amount of freight being moved, and everyone involved in the logistics chain of supply has been impacted.
Despite this freight recession, a recent survey shows brokers are largely optimistic about 2024. In fact, 61% of participants reported that they’re expecting demand growth over the first six months of the year. Spot rates appear to be bottoming out, which lends hope to brokers expecting to see a rise in rates during the new year.
While the future of freight isn’t guaranteed, several factors point to a positive outlook for freight brokers in 2024. As regulatory changes take place and fraud continues to evolve, brokers should adapt to a changing market, and safeguard their business against economic uncertainty.
Upcoming Regulatory Changes and Their Impact
Regulatory changes were a hot topic in 2023 and will continue to be a focal point in 2024. But with change comes the opportunity to improve safety standards and higher driver satisfaction–helping you create a reliable and trusted industry network.
Truck drivers have been campaigning for detention pay reform for years, and 2024 could be promising. The Federal Motor Carrier Safety Administration (FMCSA) is currently investigating driver compensation and detention pay in two separate studies that are set to be completed in July 2024 and 2025, respectively.
Uncompensated detention time is a major pain point for a lot of drivers, and the FMCSA aims to gather more comprehensive data on this topic. Fair pay for this time will help attract and retain drivers.
EPA standards/CARB (CA specifically)
As the Environmental Protection Agency (EPA) continues to implement its Clean Truck Plan, all heavy-duty vehicles beginning in model year 2027 must follow strict standards to reduce smog emissions.
In California, all drayage trucks must be registered with the California Air Resources Board (CARB) Online System by January 1, 2024, aiming toward the state’s goal of zero emissions.
While these changes will likely impact carriers significantly, they will also fit into the industry’s balance and recovery phase of a new cycle.
Freight broker bonds
Another change beginning in 2024 is the FMCSA freight broker bond and trust rulemaking. In an effort to bring more fairness to the freight broker industry, the FMCSA will enforce stricter rules around BMC-84 freight broker bonds and BMC-85 trusts. Now, lending parties must be FDIC-insured banks.
While most brokers are upstanding, the few that aren’t give the rest a bad name. This new regulation will immediately suspend brokers whose financial security falls below $75,000. If, after seven calendar days, the funds are not restored, the FMCSA will issue a notification of suspension of operating authority to the broker.
By eliminating bad actors, brokers should see a positive shift in their field—as long as their trust or bond is up-to-date with an insured bank. This will also instill confidence that carriers are better protected from non-payment or fraudulent broker activity.
As a broker, you should see these changes as potential opportunities for growth. Communication is key to setting clear expectations and making carriers feel they are getting a fair deal. Specify all accessorial charges, rate confirmations, and load confirmations, but leave room for adaptability when unexpected issues arise. This increases visibility, keeping business more efficient and secure.
Combatting Fraud Trends
Along with regulatory changes, freight brokers should also be aware of fraud trends in 2024. As scammers continue to get shut down, they evolve and find new ways to defraud brokers and other players in the trucking industry.
Emerging cyber threats and identity theft
Online security threats continue to be a huge issue for the freight industry and are likely to continue (and become even more sophisticated) in 2024. Bad actors—either from the U.S. or abroad—impersonate carriers, shippers, and brokers in order to steal cargo and intercept payments.
Brokers should invest in cybersecurity measures to protect their business and follow basic best practices.
- Use unique passwords and turn on multi-factor authentication.
- Verify carrier credentials and load details before processing any payments. Confirm all contact information carefully, use carrier scoring tools for detailed information, and take simple precautions such as calling phone numbers to verify—and save yourself unnecessary hassle in the long run.
- Educate yourself and watch out for phishing scams (through email) and smishing scams (through SMS text).
- Use trusted technology integrations and load boards that are vetted on a regular basis and prioritize strict security measures.
Bracing for Changing Economic Conditions
With a projected U.S. GDP growth of 1.5% next year and inflation and interest rates remaining elevated, 2024 may be another year full of unpredictable freight industry cycles.
Many economists predict a “soft landing” for the U.S. in 2024, but there is still a chance of recession—especially if the economy continues to slow down. Brokers should be vigilant and always prepared for any outcome.
Strategies for Economic Resilience
- Implement cost-cutting measures without compromising service
Freight brokers should look for solutions that reduce wasteful spending without compromising their level of service to both carriers and shippers. Implement systems into your work that automate small tasks, look for errors, offer pricing comparisons, track shipments, and facilitate easy communication with carriers.
You can also work on consolidating freight. Find opportunities to consolidate smaller shipments into large shared truckloads, and optimize routes whenever possible.
- Build a trusted network
Safeguard your business by building trusted relationships. Be upfront when discussing pricing, timelines, invoicing, and delivery confirmations. Offer fair, market prices. Communicate every step of the way. Commit to securing a trusted network focusing on trust and communication for business longevity.
- Use industry-leading tech tools
Integrate technology tools designed to make your work easier without sacrificing your attention to quality or detail. Let technology do the day-to-day tasks so you can concentrate on productivity.
Forecasting for Success
With a soft market, and uncertain projections for 2024, brokers are still optimistic about the coming year in freight. Changes to detention pay, EPA standards, and freight broker bonds will all positively impact the market next year, and brokers should plan for and look forward to these adjustments.
You can protect your broker business from bad actors by avoiding freight fraud, bolstering security measures, and integrating helpful technology. Further safeguard your broker business with smart economic decisions and a focus on relationship building.
At Truckstop, we’re committed to empowering brokers with leading technology, vetted load boards, carrier onboarding, and more. Request a demo today and start 2024 off on a positive note for your broker business.