BlueGrace Logistics Confidence Index has an optimistic outlook, for the fourth quarter

The new edition of the BlueGrace Logistics Confidence Index, which was issued earlier this month by Tampa, Fla.-based non-asset-based 3PL BlueGrace Logistics, could be viewed as replete with signs of cautious optimism, heading into the fourth quarter, which is traditionally viewed as the busiest time of the year for shipping activity.

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.  

From a revenue perspective, the report found that 64% of shipper respondents indicated they are optimistic regarding fourth quarter revenue growth being positive, up from 62% in the third quarter and 59% and 66%, respectively, in the first and second quarter. And for the fourth quarter, another 27% noted they are neutral, and 8% are negative.

When asked what the key drivers are for expected revenue growth, BlueGrace SVP of Managed Services Jason Lockard told LM that the main one of likely a return to more “normal” retail seasonality, as many BlueGrace clients are retailers or merchants for the retail market. And he added that a much-needed boost in sales to clear out some inventory that has been stagnant for most of 2023 is welcomed.

What’s more, negative order sentiment, in terms of revenues, fell 69.2% from the third quarter of 2022 to the fourth quarter of 2023.

“Truckload will see some seasonal relief although the LTL (less-than-truckload) sector will likely still be in an ideal capacity environment for carriers through 2023, due to the departure of Yellow,” he said.

For inventories, BlueGrace observed that positive inventory sentiment saw an 11.9% gain, which it said translates into a 35.6% growth rate, for the fourth quarter. This marks an improvement over third quarter sentiment, which went from 57% positive in the second quarter, down to 33% heading into the third quarter. Neutral inventory sentiment fell 15%, from the third quarter to the fourth quarter, for a 28.1% growth rate decline, and negative inventory sentiment was up 3.1%, for the same period, for a 23.3% growth rate.

As inventory sentiment increased, positive order sentiment went in the other direction, falling from 45% in the third quarter to 30% heading into the fourth quarter, for a 33.0% decrease rate. With a 22.4% increase in neutral inventory sentiment, that translated into a 51.7% fourth quarter growth rate, and negative sentiment was off by 7.4%, from the third quarter to the fourth quarter, for a decrease rate of 64.7%.

“Most shippers will be implementing new inventory management strategies as a departure from ‘get it at all costs’ from 2021/2022 and moving to a more JIT (Just-In-Time) environment until consumer spending changes direction into 2024,” said Lockard.