Subscribe to our free, weekly email newsletter!



Trying to make sense of Peak Season

By Jeff Berman, Group News Editor
October 24, 2012

Gauging the 2012 Peak Season in late October appears to be a bit of a mixed bag.

On one hand, things regarding Peak simply are not the same as they used to be in many respects, the biggest one being that in recent years it has failed to live up to the billing for obvious reasons: the economy, the Wall Street meltdown of 2008, lack of credit which followed the financial crisis, jobs, and many other factors.

In conversations with shippers and carriers, many have indicated that things appear to be more or less “normal,” when it comes to Peak, mostly in describing the seasonality component, which in many cases still show October being the most active month in terms of inbound volumes to North America in advance of holiday shopping.

In a recent interview, Paul Bingham, economics practice leader at CDM Smith, said that in looking at this year’s Peak Season, there are seasonal trends at work although the underlying demand factors are somewhat muted due to continued softness in consumer confidence and spending but even with that he said retailers are seeing sales that are “OK,” though not accelerating.

One notable exception to this is that instead of the majority of imports coming in August, that may be shifting to July, as noted in the LM news section this month.

But it also could be due to the fact that that many retailers brought in cargo early in advance of the possible strike between the International Longshoremen’s Association and the United States Maritime Alliance over a labor contract, which was set to expire on September 30 but received a 90-day extension through December 29, according to Hackett Associates Founder Ben Hackett.

He added that increased inventory levels could be due to low demand as well as pre-stocking due to the possibility of the for now-averted strike. But he also explained that inventory levels “are within a narrow range of movement” and do not suggest that another recession is imminent.

During its third quarter earnings call yesterday, UPS Senior Vice President of Worldwide Sales, Marketing and Strategy Alan Gershenhorn said the dramatic rise of e-commerce continue to alter consumer behavior and shipping patterns.

“Historically, peak season volume ramped up from Thanksgiving to Christmas,” he said.  “This year, we are planning for 2 peak periods: one that revolves around Black Friday and Cyber Monday, the other compressed into the 2 weeks before Christmas.”

The UPS executive added that when the company speaks to its global customer base about their expectations for this holiday season, customers say they are cautious—but also remain optimistic.

“Economic uncertainty around the world has them uneasy about how their consumers will respond this year,” he explained. “On another note, the retail inventory to sales ratio is still historically low. So their supply chain is constrained to keep up if demand is more than predicted.”

Again, back to the aforementioned point about Peak Season being a mixed bag: Determining its full impact and effect really is an inexact science if you think about it. I guess we will have a better idea in a few weeks. Until then, buckle up and enjoy the ride.

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


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!

Recent Entries

The Port of Oakland has undertaken a series of measures in recent years to attract more import volume.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that U.S. trade with its North America Free Trade Agreement (NAFTA) partners Canada and Mexico increased 8.2 percent from September 2013 to September 2014 at $102.2 billion.

NS said that the D&H lines it plans to acquire connect with the NS network at Sunbury, Pa. and Binghamton, N.Y. and give NS single-line routes from Chicago and the southeast U.S. to Albany, N.Y., which is in close proximity to NS’ Mechanicville, N.Y.-based intermodal terminal.

This follows a 1.6 cent decrease last week, which was preceded by a 5.4 gain the week before and stands as the first increase going back to the week of June 23, when the weekly average headed up 3.7 cents to $3.919 per gallon.

BNSF said that its 2015 capital expenditures will be allocated towards various areas of its business, including maintenance and expansion of the railroad to meet the expected demand for freight rail service, with 2015 representing the third straight year BNSF has invested a record annual capital expenditures investment.

Article Topics

Blogs · Peak Season · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA