Start a conversation

Peak Season dynamics continue to see changes

By Jeff Berman / / July 22, 2016

LM reader survey highlights difficulties in identifying a true Peak Season in 2016

As is the case with various facets of supply chain management and logistics, it seems like many things these days are more fluid than they used to be. And when it comes to Peak Season, it is clearly not an exception.

Understandably, economic indicators factor into Peak Season prospects. And based on the current economic environment at the moment, it is more than fair to say that these prospects are mixed, which has, in a sense, become the new normal.

Some of these indicators include things like: still-high inventories, low import growth, with imports down nearly 7%  through the first five months of the year; sluggish GDP growth and industrial manufacturing activity. On a more positive note, though, are improving consumer confidence and retail sales numbers, a strong U.S. dollar, and an ever-improving business-to-consumer growth outlook, as it relates to e-commerce activity. 

With that said, it remains difficult to definitively determine if there will, or will not, be a typical Peak Season in 2016. And data from a Logistics Management readership survey of nearly 220 buyers of freight transportation and logistics services providers points to that thesis, too.

When asked if they expect this year’s Peak Season to be more active than last year, 39.8% noted they expect things to be more active (down from 48% in 2015), with 19.4% expecting a less active Peak Season (up from 13% last year), and 40.7% saying that they do not expect a change, which was nearly even with last year’s 39%).

As for the impact of Peak Season on survey respondents’ day-to-day operations, 36.1% noted it has a very significant impact, and 52.8% pointed to a somewhat significant impact, while 11.1%  said Peak did not have a very significant impact. 

A sampling of comments and observations from the survey’s respondents painted a mixed picture of why there may or may not be a Peak Season in its truest sense.

A swimming pool and spa products shipper said was optimistic in regards to Peak, citing how more products are being shipped and more orders are being processed compared to the same time a year ago. And a semiconductor-electronics shipper said its client base is running behind last years use rate and expects the peaks are expected to be proportional.

Along with the mixed feedback from the survey, another theme in regards to Peak that is widely shared by industry stakeholders is that it simply is not what it used to be, due to things like the wide-ranging impact of e-commerce, how consumers buy products in conjunction with their delivery expectations, and mixed economic signals continuing to rule the day in what, in a sense, has become the new normal.

“I don’t expect we will see anything like what we used to refer to as Peak Season back in the last century and “Peep Season” more recently,” said Brooks Bentz, President, Supply Chain Consulting, for Transplace, a non asset-based 3PL. “Whether you can lay this to better upstream planning, changing markets, improved service, ample capacity, better technology or some combination of these factors, is difficult to stick a pin in with any degree of certainty.”

Bentz added that compared to 20-30 years ago, shippers are far more prepared for volume surges, due to technological gains available today providing advance information on incoming shipments, as well as an operating environment that is much less manual today and resulted in smoother and more efficient terminal operations, coupled with a vast infusion of capital investments to improve terminal infrastructure and capacity, which benefits both shippers and over all network performance.

Peak Season means different things for different sectors, according to Larry Gross, Senior Partner at freight transportation consultancy FTR.

“I am expecting a normal Peak Season for imports versus a very abnormal peak-less year in 2015,” he said. “Intermodal will see normal seasonality for both the International and domestic sectors.  Fall peak is less important for trucking as spring is the real peak. I think in general folks tend to remember the exceptional peaks and consider or hope that these represent ‘normality.’ Most Peak Seasons seem to disappoint and that’s because folks don’t look at the data.”

Ben Hackett, President of maritime consultancy Hackett Associates, expects this year’s Peak Season to be similar to last year’s.

“It is nothing to write home about,” he said. Until the excess inventories get worked down we cannot expect more.  Nevertheless the good news is that there is still an element of Peak season around.  Rates are going up as carriers are managing their capacity better.” - 24/7 Support including Chat

Choose files or drag and drop files
Was this article helpful?
  1. Rick R.

  2. Posted