A week away from Thanksgiving, holiday retail season is already well underway, with businesses starting Black Friday and Christmas shopping sales earlier each year. Also earlier this year, has been freight movement to prepare for the holiday rush. Let's take a closer look at holiday retail and freight in 2024 to see where things stand as the year hits the home stretch.
Holiday retail forecast 2024
The forecast for the holiday retail season is optimistic, as consumer spending is expected to rise over last year with inflation having tailed off a bit. More specifically, the National Retail Federation projects 183.4 million people will do some form of holiday shopping over Thanksgiving weekend (through Cyber Monday) alone - outpacing last year's record of 182 million.
The broader holiday shopping season is expected to see spending grow between 2.5 and 3.5 percent over last year, to as high as $989 billion in the final two months of 2024. With this forecast comes a couple of caveats, that while consumer finances are in pretty good shape, some of the country is still recovering from Hurricanes Helene and Milton and the recent presidential election could impact sentiment one way or another.
Surveys indicate shoppers are concerned about prices, but not enough to stop shopping. And while there are some worries about on-time shipping, consumers plan to buy earlier to take advantage of free shipping options - even those that may be slower.
Freight and the 2024 holiday season
Long associated with the holiday season and freight has been peak shipping season, in which retailers pull inventory forward all at once in late summer and early fall to prepare for shoppers. But after getting stuck with too much stuff as consumer spending shifted post-pandemic, that strategy has changed.
"Retailers have learned a lot of lessons throughout the pandemic," said Jon Gold, Vice President of Supply Chain and Customs Policy with NRF on our podcast last year. "Spread it out a little more so you have that consistent flow of goods rather than all at once."
This year, inventory has right-sized, part of the reason for optimism that a freight recovery is underway. And peak season this year was once again muted, as shippers did move product early - partially as an adjustment to a more just-in-time strategy and partially to get ahead of potential strikes. Supply chain-related product shortages, a worry during and after the height of COVID-19, are not expected to be an issue in 2024 either.
The freight outlook after the holidays
While holiday shelves are stocked, shippers that deal in any imports are not resting on their laurels this holiday season. With the election of Donald Trump to a second term and a looming East Coast port strike in January, freight is - or is expected to - move hot and heavy through the ports.
The Port of Los Angeles has already seen four straight months above 900,000 TEUs - the first time that's ever happened. And shippers who haven't gotten started pulling inventory forward are likely to do so soon. Part of this volume directly ties to concerns about East and Gulf Coast ports, which face a January 15 deadline to agree with the ILA on port automation language in a new long-term contract, a likelihood that's looking precarious to say the least.
The other part involves concerns about tariffs discussed by the president-elect during the campaign being enacted shortly after he takes office. Those tariffs could affect a wide array of products and manufacturing activities, and firms are to some degree attempting to head them off. Though both are uncertainties now, they should be ironed out by the end of January - and port volume may fall off considerably for a time immediately after, leaving it to domestic freight to pick up the slack.
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