The supply chain and logistics industry is poised for significant changes and advancements in 2024. Based on insights from various sources, BTX compiled the most impactful trends predicted to shape the industry's landscape in upcoming months:
The air cargo market is expected to grow in 2024, with demand predicted to rise by 4.5% according to the International Air Transport Association (IATA). In 2023, air freight saw a surge in capacity, increasing by 10% in December 2023 compared to December of 2022. Experts predict this trend will continue in 2024 due to the following indicators:
- Congestion in the ocean market caused by the delay situations in the Suez and Panama Canals and the ripple effects of the Red Sea diversions will lead to a surge in shippers opting for air freight.
- As consumers spend more money this year, we could see inventories diminish and companies begin to explore near-shoring solutions in countries like Mexico, increasing North American air freight demand. Learn more about transborder shipping.
- E-commerce has emerged as a significant driver of air freight demand. Businesses have embraced e-commerce and expanded their online presence, increasing the need for efficient and reliable air freight services.
In 2024, the global containership fleet is projected to grow by 6.8%, with ship delivery capacity expected to reach a new record high of 2.7 million TEUs. Despite improvements in the demand outlook, container shipping continues to face challenges due to the overcapacity that accumulated during the pandemic years. This overcapacity is expected to depress container freight rates, with a drop of 33.6% forecasted by Drewry, indicating a significant downgrade from previous predictions.
Compounding these challenges, the end of the year has seen the container shipping market significantly impacted by the situation in the Red Sea. The re-routing of vessels via the Cape of the Good Hope led to an increase in transit time (10-20 days), refueling delays at African ports, and container imbalances. Given the volatility of the situation and the ongoing disruptions, these trends are expected to continue into 2024, further affecting the global supply chain. As a result, the industry will need to continue to adapt to these changes and find ways to mitigate their global impact.
- Digital Supply Chain Dominance
The digital supply chain will become even more central, with technologies like blockchain and IoT (Internet of Things) providing unprecedented levels of transparency and traceability. This shift will enable more effective tracking of goods, from origin to delivery, and help in mitigating risks associated with supply chain disruptions.
- Data Analytics and Insights
The role of data analytics in supply chain management will grow, with professionals relying more on advanced analytics for decision making. This will involve leveraging big data to optimize routes, reduce costs, and predict future trends in order to make supply chain operations more efficient and cost-effective.
- AI and Automation
In 2024, the integration of AI and automation will be more prominent. Expect to see more sophisticated algorithms capable of processing vast amounts of data for more accurate predictions. The automation of routine tasks such as inventory management and order processing will also be increasingly streamlined and more efficient.
Sustainability efforts will be more crucial in 2024 including the adoption of more eco-friendly practices in packaging, utilizing sustainable transportation methods, and sourcing materials more responsibly. These practices will be driven by environmental concerns and consumer demand for more sustainable products.
In January of 2024, the E.U.'s Emissions Trading System (EU ETS) will be extended to cover CO2 emissions from all large ships (of 5000 gross tonnage and above) entering E.U. ports, regardless of the flag they fly. Carriers will be under pressure to minimize their carbon emissions and meet emission reduction targets, necessitating the adoption of sustainable practices and innovation.
Maritime freight will continue to transition towards low-emission fuels like Liquified Natural Gas (LNG) and hydrogen-based fuels, thereby reducing greenhouse gas emissions. Concurrently, electric and hybrid technologies are gaining traction, further contributing to the industry’s environmental efforts.
Lastly, air freight will concentrate on Sustainable Aviation Fuels (SAFs), which can reduce carbon emissions by up to 80%. The ReFuelEU law will mandate a minimum share of SAF usage, and airlines will need to modernize their fleets for improved fuel efficiency and a reduced noise footprint.
Sources: scw-mag.com; bollore-logistics.com; ups.com (follow these links to view full stories)
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