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

Seasonally-adjusted (SA) for-hire truck tonnage in February was down 3.1 percent (2000=100) compared to a revised 1.3 percent (from 1.2 percent) increase in January. ATA said this reading marks the lowest level for the SA index going back to last September.

It was a busy day for railroad-related legislation yesterday, with the United States Senate Commerce, Science, and Transportation Committee approving two bills with a railroad focus by a voice vote. The respective bills are S. 808, the Surface Transportation Board Reauthorization Act of 2015 and S. 650, the Railroad Safety and Positive Train Control Extension Act.

Indications given by a splinter group of the International Longshore and Warehouse Union suggest that shippers should not assume the tentative contract with the Pacific Maritime Association is a “done deal.”

Navis announced that George A. Kohlrieser, an internationally recognized expert on leadership, will present a general session at Navis World 2015, taking place March 29-April 1, 2015 at the Intercontinental San Francisco Hotel.

While its day-to-day objectives remain the same, the online load board freight-matching service Internet Truckstop announced today it has a new name: Truckstop.com.

Article Topics

Blogs · Peak Season · All topics

Comments

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


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA