The holiday season is the most wonderful time of the year, but for the logistics and supply chain industry, it is also one of the busiest. Shippers have learned to plan, due to the many disruptions and unpredictable factors at play in the supply chain over the last few years. Proactively planning requires education and insights into what to anticipate in the approaching holiday season. So, with the year round disruptions we have seen in 2022, what can shippers expect this upcoming holiday shipping season?
Terminal and Port Congestion
No surprise that shippers can expect port and terminal congestion to continue. East coast ports are now facing increased congestion with more container ships being rerouted from the West Coast due to fears of a West Coast labor strike. In fact, over the past three months, vessel capacity between the Far East and the U.S. East Coast has risen by 18.9% year over year. That being said, there is now an increasing number of vessels anchoring offshore, waiting to be unloaded.
Rail congestion also continues to be a challenge with backups at hubs. In an effort to shorten shipment delays, some retailers are shifting their cargo to trucks instead of trains.
Container and Chassis Availability During the 2022 Holiday Shipping Season
This limits the number of available containers and chassis and may potentially influence freight rates during the 2022 holiday shipping season.
The container and chassis shortage continues as port and terminal congestion remains. This is aggravated by vessel arrival delays, slower container processing, and trucking issues. The longer containers and chassis aren’t moving, the longer they are unavailable for use. This limits the number of available containers and chassis and may potentially influence freight rates during the 2022 holiday shipping season.
eCommerce Activity During the Holiday Shipping Season
While some of the eCommerce activity from Amazon has subsided, eCommerce will continue to be a significant challenge in the supply chain during the 2022 holiday shipping season.
Freight Transit Times and Delays During the 2022 Holiday Shipping Season
It’s important to factor extended transit times into your inventory management strategy
Transit delays are expected to continue through peak season due to port, terminal, and yard congestion plus chassis and container unavailability. It’s important to factor extended transit times into your inventory management strategy so that inventory arrives in sufficient time to meet demand, and to ensure your products are always in stock during the holiday season.
Surcharges and Shipping Rates
Rates have been falling throughout the summer and have not yet reached the bottom. This is expected to continue through the peak of the 2022 holiday shipping season. Fuel prices have also begun to recede from their peaks and should continue to drop due to recession fears.
Warehouse Capacity
Inventories are currently at an all-time high, stressing warehouse capacity. As consumer demand declines, this capacity will only worsen. According to a Prologis report, the United States is 800 million square feet short of warehouse space due to increasing inventories. Plus, rent growth of 22% in the U.S. is anticipated during the year with vacancy rates of 3.3% continuing.
The best way for shippers to prepare for the 2022 holiday shipping season is by having inventory in the United States. This will help mitigate the challenges that the US retail sector has faced over the last two years.
Many import customers have begun to factor extended transit times into their inventory management strategy by pulling holiday shipments forward this summer to have items in stock.
Working with a shipping partner who can proactively guide you through the 2022 holiday shipping season can help to alleviate the guesswork out of tackling current supply chain issues.
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