C.H. Robinson’s Davis assesses the 2023 Beverage Season

In the freight transportation and logistics sectors, the definition of beverage season, in many ways, speaks to having fun in the summertime on various fronts, including things like: enjoying summer weather and going to beaches and lakes; having a picnic; being on a boat, or just relaxing on the porch or in the yard, among others. A common theme among all these things is that it results in increased purchases of beverages by consumers. The typical duration of beverage season runs from around mid-May through right about now, in mid-July, according to most estimates.

So, how is the 2023 beverage season going?万博2.0app下载Group News Editor Jeff Berman interviewed Ronnie Davis, VP of North American Surface Transportation, for Minneapolis-based global logistics services provider and freight forwarder C.H. Robinson, about what is different about this year’s beverage season, on various fronts, like how it its creating swings in truckload demand and the challenges it can present for carriers, among others. The interview follows below.

Logistics Management (LM):How is the 2023 beverage season going to date, from your perspective, especially when compared to recent years that were impacted by the pandemic?

Ronnie Davis:Comparing to the early pandemic years is tricky, because people’s lifestyles changed so dramatically. But even with less travel and less eating out during the pandemic, the trend of more beverages being consumed between Memorial Day and Labor Day continued like years prior. Across our 3,900 food and beverage customers, freight volumes historically surge during beverage season in both good and bad economic environments. Last year was a solid one for beverage, and so far, this season our freight volumes with those customers are up about 3% year over year.

一件事情从大流行是明显不同的rs is the demand for drop trailer. When raw material shortages and supply chain disruptions occurred, many shippers pivoted to more live load to get freight off the docks and service their customers faster. Now they’re pushing to get back to their optimal ratio of drop-to-live-load to drive efficiencies in their operations. Our drop trailer volume in June was up 32% year-over-year. Particular to beverage makers, the expansion into more niche beverages, more flavors, and more size and calorie options means they’re running many different production lines at once. They literally don’t have the floor space for everything when it comes off the line. Drop trailer provides the solution.

LM:How are patterns in beverage consumption creating swings in trucking demand?

Davis:When it gets warmer, people are outside much more, at the beach and playing outdoor sports. Families are taking vacations and going to restaurants more. In those situations, people tend to consume more. Even simple activities like more backyard barbecues drive up beverage sales. People don’t really know what their guests are going to drink the most, so they buy more kinds of beverages than they normally do. And you don’t want to be that person who runs out, so you buy the amount you think you need, then throw a little more in your shopping cart for insurance. All that adds up to more freight volume from beverage makers during the summer months.

LM:What beverages are driving those swings?

Davis:The flow of some beverages is static throughout the year. Not too many people drink more milk on vacation than they do at home. For beverages you hydrate with or celebrate with, that’s where you see the surge in freight volumes from Memorial Day through Labor Day. For hydrating, think water, sports drinks, power drinks. There’s some increase in soda, but not to the same degree. For celebrating, the surge is driven by beer and all the malt beverages, hard seltzers and hard cider. In some regions, we get spikes of up to 50% in beer shipments in the summer.

LM:How have some beverage makers worked through excess inventory, which is a bright spot in a soft truckload market?

Davis:The post-pandemic inventory correction has been the biggest in decades, and as C.H. Robinson predicted more than a year ago, it was going to take several quarters for shippers to work through it. Where the beverage industry is a little different is that some of their product has a shelf life. Excess Halloween costumes don’t expire. Some beverages do. So, beverage makers had to right-size their inventory against expiration dates with the help of promotions, price reductions, and running less line time. In early spring, we started to see some new beverage volume coming into the market. For example, at the end of April we had a beverage customer come to us with 1,100 more truckloads of product. Many beverage shippers also build inventories in advance of the summertime surge in orders. In the past two or three weeks, several of our key customers have indicated they are now at normal summer inventory levels.

LM:What do you think the rest of the 2023 beverage season will look like?

Davis:基于早期局和我们所听到的from our customers, I think beverage volumes overall will be up slightly. We’re keeping a close eye on two factors, though. One is the extreme heat hitting Texas, Georgia and Florida. An increase of even a few degrees in temps increases how much people drink. The counter to that is smoke from the Canadian wildfires limiting outdoor activities in the Midwest and Northeast. If Major League Baseball games get cancelled, that’s a lot of beverage consumption that doesn’t happen.

LM:What are the biggest challenges and concerns from the carrier side as they relate to beverage season?

Davis:只是因为我美国货运市场作为一个整体s soft doesn’t mean every individual market is soft. There’s been some tightening at the Mexico border, partly because of beverage season, nice crops for produce and the nearshoring trend. We’ve also seen an uptick in load-to-truck ratios in California in the past few weeks. Trucking is in a transition period, moving from being squarely oversupplied to more of a balance between carrier supply and demand. In typical market cycles in the past, 5%-to-10% more trucking capacity would enter the market in the upcycle and that much would leave in the downturn. The influx of new carriers was considerbaly higher this time, at a record-setting level of more than 100,000 in just one year. While the usual signs of carriers leaving the market are there, I don't expect it to accelerate so much that it will meaningfully squeeze capacity this summer.