Taking a look at 2023 Peak Season thoughts

For more than a while now, there has been ongoing sentiment among freight transportation, logistics, and supply chain stakeholders that Peak Season simply is not what it used to be, in terms of the traditional ramp-up of inbound cargo coming into the United States, in advance of the holiday season, from, beginning in August.

至于原因,传统旺季tterns have abated, well, there are several, to be sure. The impact of the pandemic, more than three years later, continues to loom large, even though there are a fair number of reasons that could be cited to show what could be viewed as an ongoing normalization of the supply chain. And with that are also things like heavy demand-influenced swings, and swoons, too, influenced by consume demand patterns, import volumes, and inflation, among others.

What’s more, a万博2.0app下载reader survey published in July, which was based on feedback from more than 100 freight transportation, logistics, and supply chain stakeholders, found that the outlook for the 2023 Peak Season was mixed, with 35% saying it will be more active, another 35% saying it will be less active, and the remaining 30% indicating things will be the same as last year.

To get a better sense of how things are shaping up for the 2023 Peak Season,Newsroom Notescaught up with two industry experts, representing trucking and ocean cargo, respectively, to get a sense of where things currently stand.

For the former, Ken Adamo, Chief of Analytics for DAT Freight & Analytics, explained that in looking at the 2023 Peak Season, aside from a current run-up in fuel costs, that things are currently playing out as expected.

“Things are really typical, at the moment,” he said. “We are looking closely at the numbers for the net changes, for truck additions and subtractions, from interstate motor carrier authorities,” he said. “That went crazy during the pandemic and went up and up, and now it is down, with an attrition in the range of 19,000-to-20,000 trucks. And prior to fuel going up, it was inching closer to flat.”

When that number again turns positive on a sequential basis, which Adamo said could be August or September, could serve as a sign that the market is in recovery and more reflective, or indicative, of a bustling Peak Season, with the expectation that this year is likely to be viewed as typical, for the most part, but that may have a to be determined feel to it, based on the impact of Hurricane Idalia on freight markets.

And he observed that this year’s Peak Season has a bit of a 2019 pre-pandemic feel to it, to a degree, adding that in 2019 Peak Season ran into the second or third week of January 2020.

“我认为只要我们不得到一个负面surprise, it's going to be a typical Peak Season,” he said. “The consumer sentiment is still very strong. I think by this point the retailers and the manufacturers have adjusted to inflation, offering products and SKUs at lower price points. Shrinkflation is very much a thing. I do genuinely think you'll see a kind of on trend, a [normal] Peak Season I wouldn't expect something that surprises on the downside. I think the real wildcard that we don't have a ton of visibility into—or no one really does—is how much of what the major retailers are putting forward, in terms of destocking and inventory levels matching what's actually happening on the ground, because those numbers are reported in an extremely high aggregate. And we all saw during the pandemic how that SKU mismatch imbalance, kind of regional dispersion of the inventory, all have really big impacts. Again, absence of a major surprise, I would just kind of expect Peak to go as expected.”

On the ocean side, Chris Rogers, Head of Supply Chain Research for S&P Global Market Intelligence, said that based on commentary from some container lines, freight forwarders, and CPG shippers, the 2023 Peak Season will not result in significant volumes.

“We can never rule out that August is suddenly a bumper month a load of boats came in,” he said. “But the reality is that the best you can probably hope for is that August might be flat to down a bit, which is where volume is. At this point, we've had three disruptive years of Peak season so I'm not even sure most companies and most importers even have a good sense of what a [true] Peak Season even is anymore.”

To that point, Rogers noted that at this time last year, supply chain conditions were murky, in the sense that networks were still clogged and stakeholders were starting to dig out of a difficult pandemic-driven environment.

And he added that in September 2022, import volumes started to see significant declines, as inventories were high, leaving the door open for this year’s fourth quarter to see annual gains, due to easier comparisons, which Rogers said could be flat-to-up.

It stands to reason that the 2023 Peak Season will end up right about where it was expected: nothing too major, nor anything too insignificant either. Given what the supply chain has been through, that is not the worst place to be. Will there be a material bounce back of sorts in 2024? It is too early to tell, but the potential is certainly there.