For regular freight watchers, the industry has a few key markers on the calendar. At this time of year, one that every logistics and supply chain pro looks toward is peak season. Peak shipping season typically begins in late July and runs well into the fall, and it gets its name as retailers and producers are theoretically shipping at a much higher rate - stressing capacity to keep shelves full of product for back to school through holiday shopping.
The freight market, though, has been down for the past couple of years, and the old reliable that had been peak season has been less than reliable. But there have been some so-called "green-shoots" emerging of late suggesting the road back to normalcy is underway. So what's the peak freight situation in 2024?
Peak shipping season 2024
Peak shipping season 2024 does exist, just in different form than a traditional year. For one, timing has been somewhat accelerated with shippers staging goods for both back to school and holiday shoppers earlier than usual. In other words, the typical timeframe has moved up as companies have taken note of labor unrest at East Coast ports and on Canadian railroads. Moving product sooner ensures it will be well-positioned for a Q3 and Q4 shopping season that is expected to be a bit more robust this year as well.
Getting back to the East (and Gulf) Coast port labor situation, shippers have not only begun situating inventory sooner, they've also focused back on West Coast ports - which have a fresh contract with dockworkers in their pocket. And the West Coast, specifically Southern California, is the epicenter - and really the only center - of 2024's peak season, and common peak issues are only affecting a select few.
Southern California peak season
The situation in Southern California is tight, with issues providing enough capacity and equipment to meet demand as increased volume comes through the ports of Los Angeles and Long Beach. That sounds peak-ish, and it is, but those conditions are generally localized to that area. Since it does involve the busiest ports in the country, though, that means a number of shippers and carriers are affected.
The effects have included a spike in ocean rates (though those are falling back already), a spike in truck and intermodal spot rates, and even, in certain cases, peak season surcharges. Yes, peak season surcharges have occurred, but not to a great extent - as they tend to only affect those seasonal customers who move the vast majority of their product for the end of year retail push.
Surcharges are also only triggered when these shippers pass rolling volume thresholds, so most are not experiencing any such fees. Additionally, those companies under contract who move freight on a generally consistent basis have not seen surcharges this year. So just as it is a very specific "peak" season, it gets even more granular to find shippers dealing with the surcharge.
Peak season everywhere else
Outside SoCal, peak season is still a no-go this year, as capacity is still plentiful. While recent indicators are showing some slightly positive movement in the freight market, it's far from a scenario where peak pressures exist. There are suggestions of improved volume heading into the holidays, but it's likely to result in just a slight elevation above the norm. The hope continues to be that a stronger recovery will occur next Spring - and perhaps next year will mark a return to the good (and the not so good, depending on perspective) of peak season.
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