The peak season will soon be in full swing for shippers across the country and according to some experts they will be facing a steeper and tougher peak to climb than in seasons past.
As the U.S. economy continues performing and staying on one of its best trajectories in years, some experts believe it will no doubt lead to higher demand from consumers.
According to a panel of freight industry experts, the demand is butting up against tight transportation supply, especially for trucking. As a result, intermodal freight likely will become an increasingly popular option during the peak season.
In response to growing intermodal demand from e-commerce, BNSF is adding hub capacity in Southern California, which remains the epicenter for Asian imports into the United States. BNSF also is looking at container-handling technology such as what OOCL installed at its Long Beach terminal.
The panel made the comments during a recent webinar hosted by American Shipper. Patrick Duffy, research director at American Shipper, said this peak season stands out for “particularly daunting conditions: surging imports, perhaps to beat tariffs; reductions in carrier service due to consolidation; GRI (general rate increases); and bunker surcharges.”
Duffy went on to say, “As trade rhetoric continues to grow negative and trucking capacity remains tight, you have beneficial cargo owners and forwarders shipping earlier this year and wondering whether they will have to rely on air cargo to fill their shelves,”
Another panelist on the webinar Ibrahiim Bayaan, chief economist at FreightWaves, said this year’s peak shipping season comes against the backdrop of a robust U.S. economy. Bayaan went on to say that the U.S. gross domestic product grew 4.1 percent on an annualized basis in the second quarter, “one of the strongest quarters since the recession,” while annualized GDP growth once hovered closer to 2 percent to 2.25 percent, “we have been able to exceed those levels over the past several quarters, particularly this year because of some policy changes.”
In preparation for the predicted increased demand, many carriers are taking steps and strategizing on what their best practices will be.