A slowdown in shipping volumes and rates this year has created one of the most challenging freight markets of the past decade, but one of the industry's biggest events has still brought more than 1,400 logistics leaders to Chattanooga this week for a "Future of Freight Festival."
Craig Fuller, founder and CEO of FreightWaves, which organized the three-day conference this week, said the event is becoming an annual affair with plans already underway for a similar festival again next fall.
"This is really a chance for our industry to come together," Fuller told hundreds of festival participants at the start of the conference Tuesday at the Chattanooga Convention Center. "But the reason we hosted this in Chattanooga is that there are more people per capita dedicated to the freight economy here than any other city in North America. It is one of the most important industries in our city with 10 of the 12 fastest growing companies on the Inc. 5000 list dedicated to logistics."
Fuller, whose family has helped lead two of the nation's biggest long-haul trucking companies in Chattanooga, started FreightWaves as an information and media company that tracks the rates and activities of shippers across the nation on its Sonar network. FreightWaves unveiled an updated display package for its popular Sonar system at the freight festival Tuesday as part of the new technology systems that continue to reshape the transportation industry.
Fuller calls Chattanooga "the Silicon Valley of the logistics industry," and Chattanooga Mayor Tim Kelly appealed to industry leaders Tuesday to keep investing in what he called "the freight capital" for the industry.
"We are at the heart of freight alley," Kelly said. "It has always been a hub for transportation going back to the Civil War, and it's just a fantastic location for everything related to freight logistics."
Kelly said Chattanooga "struggled for some time to find its place "after manufacturing cutbacks a generation ago cut thousands of local jobs and reduced the city's population in the 1980s by more than 10%. But the mayor said the logistics cluster of businesses "is a cluster we are leaning into" for future economic growth in Chattanooga. The growth in trucking, freight brokerage and other support industries has already created thousands of jobs in the past couple of decades and helped reverse the city's population loss with now above-average growth.
Kelly said Chattanooga is now similar to Austin, Texas, 30 years ago, "and our challenge is to keep it like Austin was" as a growing and thriving city without the big city gridlock of cities such as Austin, Nashville or Atlanta.
"We've always been a very inventive and entrepreneurial city," Kelly said."I ran for mayor because I believe in the potential of this place, and that potential is tied with freight logistics for the foreseeable future, if not forever."
But industry leaders conceded that for the near term, the industry's growth is slowing after years of growing shipping demand.
"It certainly is a very challenging time for us from a market perspective," Ramona Hood, president and CEO of FedEx Custom Critical, said during a presentation Tuesday. "If we think about the next nine to 12 months, it's still going to be very tough times, and most organizations are thinking about productivity and ways to utilize technology to do things faster and smarter."
In the third quarter, earnings for Knight Swift, which bought the Chattanooga-based U.S. Xpress earlier this year, were down by 67.7% from year-ago results. Covenant Logistics reported adjusted net income in the third quarter was down 25.7% from a year earlier.
In its most recent industry assessment, FreightWaves reported last month that "the truckload market has faced numerous challenges, but softness in the market persists."
"Volume levels in October have followed seasonal patterns, dropping throughout the first part of the month," FreightWaves said in a recent industry report. "Rejection rates remain depressed, which highlights that carriers are in a challenging spot, reluctant to operate any, if at all, in the spot market."
Due to higher interest rates and other factors, the shipping industry is having to grapple with slower or even potentially negative growth in the global economy, officials said. But Hood, who has been in the industry for more than 30 years, said she remains confident in the long-term market, especially for companies that take advantage of new technologies to improve their efficiency and broaden their markets.
Even amid the industry downturn, participants in this week's Future of Freight Festival were able to take time to enjoy some music and parties Tuesday night in Chattanooga.
"This is a fantastic time to be here in early November, and we want you to take some time to see our city," Fuller told the festival participants at the start of the business convention.