The “main” peak shipping season happens during the second half of the year between the months of August – October. This is due to importers seeking to increase their inventories in anticipation of Black Friday, Cyber-Monday and Christmas holiday sales. This period is known for high, volatile rates, rolled cargo, trucking delays, and other supply chain interruptions that we are all very familiar with.
Many had predicted that since the lockdowns in Shanghai had been lifted, there would be a large amount of cargo which would swamp the market this summer, potentially making this year’s peak season “even more chaotic” than last year. So far, this did not transpire and operations in Shanghai have returned to normal, with port congestion easing throughout China.
While some experts are predicting a worsening of the bottlenecks as peak season unfolds, there are other indications that a drop in import demand may be in sight.
Skyrocketing energy prices and inflation, combined with a reversal of consumer spending patterns, favour services rather than physical goods, which could lead to an inventory overshoot and a drastic drop in demand. At the same time, many companies have already built up excessive amounts of inventory, further reducing the need for replenishment at this time.
While everyone would like clarity on which of these two scenarios we will end up seeing, the reality is that the market is teetering on an edge between the two, and it will be a little while before it becomes clear which one it is.
For more information, contact Debbie McGuire, Director – Freight Solutions.
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