Q1 optimism seen in BlueGrace Confidence Index

logistics index
Author PhotoBlueGrace Logistics - December 11, 2023

The recently-released edition of the BlueGrace Logistics Confidence Index issued by Tampa, Fla.-based non-asset-based 3PL BlueGrace Logistics presented a mixed outlook, regarding things like revenue outlooks and inventory rebuilding, heading into 2024.

Jeff Berman | Logistics Management
December 11, 2023

BlueGrace described this report as an important tool in measuring expected expansion or contraction within the logistics space. And it added that by analyzing revenue forecasts, inventory levels, and order volumes, it provides industry stakeholders with valuable insights into what to expect next quarter and how that reflects the freight market.

Data for the BlueGrace Logistics Confidence Index is aggregated through a survey of shippers and reflects all freight transportation modes, while correlating growth or shrinkage to overall industry volume of shipments and price of products, according to BlueGrace.

Looking at revenue growth, the report observed that sentiment regarding revenue, for the first quarter (Q1) 2024 remained in familiar territory, with 65% of shipper respondents expecting positive revenue growth, in line with previous quarters, including: Q2 2023, at 66%, Q3 2023, at 62%, and Q4 2023, at 64%. As for other Q1 revenue expectations, 20% of respondents were neutral, and 16% were negative.

BlueGrace Chief Marketing Officer Mark Derks told LM that a key driver for the 64% of shipper respondents positive about Q1 revenue growth includes reductions in inventories driven by year-end seasonality from retail markets that will lead to some replenishment activity.

“That should translate into keeping revenue somewhat balanced into Q1 2024,” said Derks. “Shippers remain confident in current customer demand levels, but show no indication of growing beyond current demand levels.”

As for how this expected revenue growth can impact Q1 inventory levels, the report pointed to positive inventory sentiment growing from 45% to 51%, from Q4 2023 to Q1 2024, with 41% neutral and 8% negative.

When asked what is driving the confidence in inventory rebuilding, Derks explained that year-end demand will draw down inventories at some level which, in turn, will activate an inventory replenishment cycle.

“Current demand is high enough to reduce some inventory and therefore lead to some add backs in Q1 2024,” he said. “The correlation to a flat revenue outlook is supported by a confidence in growing Q1 2024 inventory. A slight uptick in orders signals a reduction of margins that help clear inventory to maintain business volume. This also supports an inventory rebuilding environment.”

Confidence in orders growth reflects a modest environment with a balance between supply and demand.

As for the impact of inventory sentiment on shippers’ order levels, positive sentiment took a big turn up, from Q4’s 52% to Q1’s 52%, with 43% neutral, down from Q4’s 66%, and 5% negative, in line with Q4’s 4%.

BlueGrace’s Derks said that confidence in orders growth reflects a modest environment with a balance between supply and demand.

“Demand is a large contributing factor in the marketplace and seeing consistent order volumes should be stabilizing to transportation and logistics providers,” he said, “Inventory replenishments also affect demand levels. The movement in orders does not reflect enough of an increase in volume to affect the truckload market in a meaningful way, but could have small implications for less-than-truckload and parcel shipments.”

Zaregistrujte se nyní a začněte svou vzrušující cestu do světa online sázení Ice Casino!
BetAndreas - будет твоим прексрасным будущим!
Лучшее что ты мог найти на просторах интернета собрано здесь - BetAndreas !