Trucking Companies Prepare for a Busy Peak Holiday Season
Trucking companies are preparing for the busiest time of year. With the recent effects of the pandemic in trucking on top of the holiday season, Shippers are expected to prepare for record peak season volumes. The National Retail Federation expects holiday sales will increase by 8-10% this year.
While more Americans are getting fully vaccinated, transportation is also expected to increase during this time with shippers and retailers working together to get products from manufacturers to stores in the most cost-efficient and innovative ways possible.
Trucking companies: Longer shipping delays to be expected
The trucking industry will experience increased demand for freight hauling services as individuals and businesses see an increase in holiday purchases this year amid extremely tight capacity. Although many companies are making efforts to get back on track after the Covid-19 outbreak, shippers and consumers should be prepared for delays in product deliveries. The trucking industry has been heavily impacted by this pandemic and it may take some time before they can return to previous levels of service.
According to the studies of Logistics Management, 79% of freight companies, logistics, and supply chains say operations will be pushed to the limit this year and as a result, there will be longer shipping delays. Consumers should expect slower delivery times as companies struggle to keep up with the demand of the holidays this year.
Inventory levels and transportation needs continue to rise
The inventory level for retailers, manufacturers, and wholesalers continue to increase across all distribution channels and many businesses are struggling to maintain a healthy balance between carrying too much or too little inventory. It is important that companies are able to anticipate consumer demand and adjust their supply chains accordingly, which will be difficult this year as transportation lags behind the increased holiday purchasing trends.
The need for the trucking industry continues to grow with manufacturers receiving more orders than ever before due to high inventories nationwide.
Supply Chain Issues to Get Worse
Trucking companies say millions worth of holiday goods are backed log in the ports of Los Angeles and Long Beach. The trucking industry is already facing issues with congestion and delayed deliveries, which will only get worse as the holiday season approaches.
It’s estimated that $24 billion worth of goods were lost in transit due to port delays in the last two years and this year could be even worse if companies don’t find ways to move products faster through ports. Bottlenecks and congestion will continue to be a serious issue for transportation companies into the second half of 2022 and the increase in shipments with holiday goods will only make matters worse.
Expect Increased Rates in Trucking Companies
As shippers battle to keep up with holiday freight demand, the trucking industry is projected to encounter increasing demand, which means rates will continue to rise across the country. Inflation has reached its highest in 30 years, which is a sign that the economy is thriving and as a result, companies will need to find ways to keep up with demand.
The Executive Director of Los Angeles Port already proposed that cargo shippers pay fines for any cargo that is idling on the docks for more than 9 days. While this may decrease delays, transportation companies will need to raise their rates in order to compensate for the increased time on docks. While ports are now working 24/7, it is difficult to unload all the containers in time for shipments heading back out to retailers.
As the supply chain in the U.S. continues to face serious issues during the Christmas holidays, consumers should expect delays and increased shipping costs passed on to them. The trucking industry is preparing for a busier peak season but the risks of increased congestion and delayed deliveries are still very high.
While Christmas presents are mostly purchased online, the massive amount of shipments headed to retailers will put a strain on trucking companies.