Summer's just around the corner (think beach days and barbecues!), and with Q2 in full swing, it's the perfect time to get a grip on the latest freight market trends.
Summary:
Retail Heats Up after a Chilly StartLet's Get Ready to Grow: The Produce Aisle AwaitsNew Contract Rates: Buckle Up for Accessorial FrenzyThe Trend: Pre-Audit
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Retail Heats Up After a Chilly Start
While a frosty January dampened spirits (retail visits dipped slightly), the retail sector saw a steady comeback throughout Q1. By March, year-over-year (YoY) weekly visit growth gained momentum, culminating in a whopping 6.1% YoY boost during the week leading up to Easter Sunday (March 31st). This upswing can be partly attributed to the increased hustle and bustle in stores as shoppers geared up for the holiday (remember, Easter fell on a different date in 2023).
Discount stores emerged as the season's superstars, boasting an impressive 11.2% YoY quarterly visit growth. Hot on their heels were grocery stores, fitness centers, and superstores, all of which outperformed the overall retail industry.
Within the discount sector, Dollar General reigned supreme. In fact, visits to their stores raked in nearly half (44.7%) of the segment's total Q1 foot traffic. Dollar Tree, Family Dollar, and Five Below followed closely behind, collectively capturing a staggering 91.6% of all discount store visits during the quarter. All four chains enjoyed positive YoY quarterly growth, solidifying their dominance in the discount retail landscape.
Warehouse Clubs Remain a Popular Destination
Just like in Q4 2023, membership warehouse clubs like Costco, BJ's, and Sam's Club were a major driving force behind the positive visit growth in the superstore category. This trend likely reflects a continued focus on value-driven shopping, with consumers seeking to stretch their budgets further. However, retail giants Walmart and Target also held their own, experiencing positive YoY growth in foot traffic (3.9% and 3.5% respectively).
Let's Get Ready to Grow: The Produce Aisle Awaits
After a rough year for produce in 2023, things are looking up for 2024!
Warmer weather has brought signs of life to seasonal produce markets, particularly in southern regions like Florida, Texas, and California.
These areas are experiencing rising rates and tighter capacity, hinting at a potential increase in harvests. However, a 5% decline in the national carrier base could lead to slight disruptions throughout the year.
New Contract Rates: Buckle Up for Accessorial Frenzy
With Q1 over, most shippers have finalized transportation contracts. Brace yourselves – many new rates are down again, putting pressure on carriers, particularly those heavily reliant on contracts.
The Accessorials: A Challenge for Shippers
Accessorial fees, those pesky add-on charges, remain a major pain point. They impact both shippers and carriers, leading to disagreements and frustration. Here's the data breakdown:
- 74% of shippers consider accessorials crucial when choosing a freight provider.
- 19% believe they significantly impact their budgets.
- The good news? Most shippers (71%) are actively seeking ways to reduce accessorial spend.
Technology to the Rescue: Streamlining Accessorial Fees
The future looks brighter! 76% of shippers and 66% of carriers believe technology will significantly reduce accessorial disputes.
The impact of accessorial fees goes beyond the initial cost. They also create an opportunity cost by slowing down back office employees. 61% of shippers report that managing accessorial requests is one of the biggest time-wasters for their accounting teams. This wasted time could be better spent on more strategic tasks.
The Trend: Pre-Audit
The Pre-Audit: A Proactive Approach to Cost Control
With the upcoming OSRA changes taking effect on May 28th, 2024, a powerful new strategy is emerging: pre-auditing accessorial fees. This proactive approach empowers shippers to gain control of their costs before final invoices arrive.
Why Pre-Audit is a Game Changer?
- Consignees are now liable for detention and demurrage charges.
This means you're on the hook for these fees unless you can prove they're inaccurate.
- Invoices must include specific OSRA data points to be valid.
Without this data, you can't contest the charges.
- Pre-auditing ensures you only pay for valid charges.
By reviewing invoices beforehand, you can identify and dispute any errors or inconsistencies.
Real-World Results: Taking Control of Accessorials
GE Appliances is a prime example of how shippers can save significant money.
By auditing historical fees, they were able to avoid paying over $1.55 million in detention and demurrage (D&D) charges. Now, with a system in place, they're taking a proactive approach to manage these costs.
Very recently, here's what A. Alejandro, Logistics Specialist at Deckers Brands, just said about their new experience with BlueCargo's solutions:
"At Deckers Outdoor Corporation, we highly recommend BlueCargo as they have helped us save and recoup over $742K in Per Diem disputes. We are ecstatic with the findings and the outcome that has accumulated over the past few weeks. We are looking forward to the next few weeks and additional savings/credits to come."
BlueCargo: Your Pre-Audit Partner
Don't wait until you receive an invoice filled with surprise fees! BlueCargo can be your secret weapon for navigating the new OSRA landscape. Here's how we help:
- Win 95% of disputes with our rock-solid evidence.
- Automate invoice processing in under 2 minutes.
- Boost operational efficiency by identifying trends and root causes of accessorial charges.
By partnering with BlueCargo, you can gain control of your accessorial fees and ensure a smoother, more cost-effective summer shipping season.
Schedule a FREE consultation with our team HERE.
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Sources for analytics:
- Coyote logistics: Shipping Trends for April 2024: Latest Freight Market Cheat Sheet
- Placer.Ai
- denim forecast
- BlueCargo Teams Updates
- eMarketer
