The state of the current freight market and predictions for the next few months have been hot topics of discussion as we head into peak season. A survey of industry professionals from Logistics Management found that “there is a strong sentiment that the 2021 Peak Season will be more active than it was a year ago, with 79% of respondents indicating that will be the case, with 16% contending it will be similar to 2020, and 5% expecting it to be less active.”
The ports are a prime example of the fact that the supply chain has not slowed down throughout 2021. In 2020, the situation at the US ports was the worst in history, but instead of improving like many supply chain trends and analysts predicted, it actually worsened in 2021. In October, a high of more than 100 ships were backlogged off Southern California ports, the area responsible for nearly half of all US imports, waiting to be unloaded. Analysts estimate that in order to clear this backlog, no more vessels could arrive at the ports for two consecutive weeks, which is a situation that’s unlikely to ever occur.
Labor challenges and trends
In addition to the situation at the ports, the demand for transportation continues to stretch the limits of what the market can reasonably haul. The labor difficulties are not unique to the logistics industry, but the American Trucking Association reports the industry would need to hire approximately 1.1 million new drivers in the next decade to offset the strain. This would equate to 110,000 drivers per year.
…the American Trucking Association reports the industry would need to hire approximately 1.1 million new drivers in the next decade to offset the strain. This would equate to 110,000 drivers per year.
In Q2 2021, more than a quarter of open jobs in the US were in logistics, and ecommerce fulfillment alone requires roughly three times the labor of traditional warehouse operations. 36% of retailers and brands need additional labor to meet their holiday fulfillment volumes. This is especially important this year because many consumers will continue their online shopping sprees for the holidays. Supply chain trends predict that peak season delivery demand will exceed parcel capacity by 5 million pieces per day, as parcel carriers are facing labor shortages, as well.
Preparing for 2021 peak season in a tight freight market
As we rapidly approach the traditional peak holiday season, looking at supply chain trends can help with predicting how the season might shake out. It’s safe to assume the current market trajectory will last for several more quarters at the least. Consumers will likely continue to channel their spending through ecommerce as well as brick and mortar stores and it’s also likely that there will not be enough capacity to handle the influx of volume. These conditions will strain the market even more, and freight rates will continue to rise.
Consumers will likely continue to channel their spending through ecommerce as well as brick and mortar stores and it’s also likely that there will not be enough capacity to handle the influx of volume. These conditions will strain the market even more, and freight rates will continue to rise.
Current Supply chain trends also suggest that peak season may hit its peak earlier than usual this year. According to a survey from UPS, in 2020, only 17% of shoppers planned to finish their holiday shopping before Black Friday, while this year, nearly 1 in 4 shoppers say they will finish their shopping before the traditional holiday season even kicks off. Additionally, nearly all consumers surveyed (95%) said they would start their holiday shopping earlier this year if sales and holiday promotions were launched earlier in the season.
How winter weather affects logistics and the freight market
Winter weather affects our everyday lives in the form of blizzards, ice storms, heavy rain and cold temperatures. When it comes to shipping freight, inclement weather can cause a variety of problems from delays to increased costs. It’s not uncommon for all shipments to pause when road conditions are unsafe due to flooding, too much snow accumulation or road closures. Not only does this cause inconveniences for shippers, but it can also strand drivers if there are no alternate routes available. Because many shippers are traditionally dependent on keeping shipment schedules on time, weather-related disruptions are more than just frustrating, it can be the difference between their product being on the shelf next to their competitors or not. Working with a transportation provider that has the expertise and scalability to help you handle delays and extra freight volume during the busy peak season is vital to your success as a company.
“Whether you’re experiencing an unforeseen influx in volume or delays or reroutes due to inclement weather—ITS works non-stop to provide solutions to overcome any adversity for our partners. Through collaboration, technology and years of experience, we’re here to make your job easier when it’s not easy to do.”
Joey Lorts, Business Development Manager
ITS Logistics can help you stay ahead of supply chain disruptions
At ITS, our dedicated fleet services rely on a variety of tech platforms, state-of-the-art equipment, and the expertise of our experienced team members to ensure products get from their origins to destinations safely and efficiently. Predicting the weather is not a definitive process, but by utilizing the best tools and most accurate weather information to plan ahead and by rerouting shipments before they are delayed—we can prevent profit loss for everyone involved. Our talented team members have years of expertise in transportation and logistics planning and know the regions we operate in better than anyone.If you have any questions or would like to learn more about ITS and our process, contact Joey at (775) 501-3211 or fill out a form today.
Joey Lorts, Business Development Manager