January 14, 2025 • Market Updates
2025 has been an eventful year already. As the year begins, Quarter 1 expectations have either solidified or changed drastically. So, at FSL, we’re considering the first few weeks of the new year as a litmus test for what is to come in the first quarter.
Here are our expectations for Q1:
Push for AI Usage
Among clients, brokers, and carriers alike, AI is the future. For clients, AI will continue to be utilized for warehousing, stock replenishment, and, most impactfully, fleet optimization. With AI-assisted standards for fleets, drivers and brokers will equally have to adhere to stricter client parameters. This, in turn, can oust carriers, whether newly partnered or incumbent, if they don’t keep up.
Truck Rates Increase
The market continues to impact trucking companies left and right. Just this week, FreightWaves reported the Chapter 11 bankruptcy of 2 major St Louis trucking companies. As more carriers leave the roads, a scarcity of drivers in certain major markets means rates are at risk of rising. So, will we see the continued shuttering of doors that 2024 saw?
E-Commerce Boom Continues
Even with news of tariffs and high prices, consumer spending soared to the highest level since the COVID-19 pandemic in 2024. And much of that was e-commerce. With e-commerce comes an increased demand in last-mile delivery. As well, the possibility of dry van rates rising, niche and specialized moves, like last-mile delivery, may become a more viable transportation solution.
Sustainability Prioritization
There has been a major push for sustainability for years now. But in the wake of disasters like Hurricane Helene and the L.A. Wildfires, we expect a bigger and more urgent push than ever before. Clients may demand to work exclusively with EPA SmartWay Partners or require use of the low-emission vehicles. Like the push for AI, sustainability is closer to becoming a necessity rather than a recommendation for logistics partnering.
East Coast Ports Ramp Up
The combination of the recent ILA contract negotiations and the L.A. wildfires makes the East Coast an easier bet for imported goods. As well, impending tariffs, particularly targeting Chinese goods, spell for busier ports in the East. How much the tariffs will affect trade from the EU remains to be seen. Either way, we may see a diversion of goods to New York, New Jersey, Savannah, and more.
Diesel Prices Even Out
Just as we all hoped, 2024 saw lower gas prices. Diesel prices dropped in particular by over 10% from 2023. While we don’t foresee pre-pandemic prices happening just yet, we anticipate an evening out of pricing, so neither drivers’ wallets or clients’ wallets will hurt so much.
At FSL, we keep an eye out for impacting factors so you don’t have to worry. We wish an easier rest of Q1 than the first weeks of January have shown. Let’s have a safe and successful first quarter, everyone.