Peak Season Shifts
There has been a lot of tumult in the transportation industry recently. There was the threat of an International Longshoremen’s Association strike, and there was/is the devastation of Superstorm Sandy. In addition to these huge factors, there is the continuous factor of the economy and its effect on supply and demand. Due to all of this, peak season for freight shipping is not as predictable as it used to be.
Due to a difficult economic time, peak season has had lower numbers in the past few years. The reason is simply that people do not have as much money to spend on the holidays as they used to. Even though October is typically a month of large inbound freight volumes to the U.S., the volumes are still down overall comparatively.
Also seemingly due to the economy, peak shopping times are being found to be much shorter. Rather than sales steadily climbing from Thanksgiving to Christmas, businesses are preparing for two shorter peak periods – Black Friday and Cyber Monday, and the final week or two before Christmas.
This year there was an interesting shift in that much of the volume that typically is imported in August was imported in July instead. Reasons for this may include the threat of the possible strike between the ILA and the U.S. Maritime Alliance, which ended up being extended through December 29th.
Much of New York and New Jersey is recovering from Superstorm Sandy. Even though many carriers and ports are functioning again, they are backlogged and may face transport delays. Hopefully most of the transportation industry in those affected areas will be able to recover sufficiently to take advantage of the holiday shopping season.
Businesses are being cautious and tend to be holding less inventory to save costs and reduce risks. This makes forecasting for the holiday season critical. If consumer demand is higher than expected, you may miss opportunities if your supply chain cannot catch up quickly. Of course, no one truly knows how the peak season will pan out from year to year before it actually happens.