The jury is still out on Peak Season

A weaker-than-expected Peak Season may be in the making, according to a recent report. But we won’t likely know if that is 100 percent true until freight data through October is complete. If it is true, it is sure to be disappointing as many said and reported (yes, me) that there really would be a Peak Season in 2010.

By ·

As an editor in what is truly a multi-faceted industry, I look at myriad news sources to get information on the things I cover.

These sources vary, but to a large degree they are comprised of newspapers, wire sources, academic journals, and company reports, among others. But one source that is particularly helpful is analyst reports by Wall Street firms tracking the freight transportation and logistics sectors.

While I am not the direct target audience for these reports, I find that they are highly effective in helping me keep up with the industry. And that leads me to my actual point. A Morgan Stanley report I recently received suggests what many have been suspecting for a while: some freight activity appears to be slowing down, no matter how you dice it.

Look at this passage from Morgan Stanley’s Truckload Freight Index:

“After showing signs of normal peak season trends for several weeks, our dry-van index showed a deceleration over the past two weeks. Regionally, the Midwest and Northeast are seeing the greatest deceleration.”

Now, if your initial reaction to that is “Big deal,” I get that. But, wait, there’s more:

“On a seasonally adjusted basis, our dry van demand index is showing a sequential decline. There is a chance this may be an extended post-Labor Day payback, but [it could signal] a weaker-than-expected peak season.”

A weaker-than-expected Peak Season may be in the making, according to this report. But we won’t likely know if that is 100 percent true until freight data through October is complete. If it is true, it is sure to be disappointing as many said and reported (yes, me) that there really would be a Peak Season in 2010.

It is not like there are not good things going on. Look no further than the most recent import volumes from the Ports of Los Angeles and Long Beach. Simply put, they are up…a lot. But why are we seeing this Morgan Stanley report of a sequential decline then?

Actually, I did not mean to ask that question, as I am neither an economist nor a logistician. At any rate, it would be great to be writing a story in November about how great the October Peak was. Maybe this is just a lull and that story will actually happen, who knows?

It could be wishful thinking at the end of the day, but that still remains to be seen. What are you seeing in the market these days in terms of Peak Season-related activity? Were our initial hopes driven by the inventory re-build we saw happening in the first half of the year?

It is clear retailers are standing pat with what they have until they need more. And that makes sense, considering they don’t want to be caught with extra stock like in January 2009, when simply abysmal became rather dire for many. But consumer spending appears to be staying at constrained levels with no real indication it is going to pick up, especially on the heels of a very (or perhaps slightly below average) Back-to-School Season.

That leads to the next point of whether the so-called economic recovery is, in fact, a consumer-led one (which may not be the case) or a manufacturing-led one (which may be the case. But that is another blog for another time.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Peak Season · All Topics
Latest Whitepaper
Improving E-Commerce Fulfillment Through Business Integration
As e-commerce continues to outpace conventional retail, companies of all sizes are finding ways to disrupt traditional business models and seize market share.
Download Today!
From the February 2017 Issue
As the new administration sends waves of uncertainly through the global trade community, this could be the best time ever for shippers to build an investment case for GTM. Here are five trends you need to watch if you’re about to put these savvy systems to work
Carrier Consolidation Keeps Shippers Guessing
Getting Value from the Cloud
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Advance your career with the fastest growing logistics certification – APICS CLTD
During this webcast presenters will give an overview of APICS and the new Certified in Logistics, Transportation and Distribution (CLTD) designation. Learn how the CLTD program can help you stay on top of current trends and advance your career.
Register Today!
EDITORS' PICKS
ASEAN Logistics: Building Collectively
While most of the world withdraws inward, Southeast Asia is practicing effective cooperation between...
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...

Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...
Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...