Truckers may enjoy increased opportunities to spend the holidays with family and friends as the freight transportation season peaked early.
“The fourth quarter is generally the peak of the holiday shipping season,” David Yeager, chief executive of Hub Group, reportedly said. “However, judging by the feedback from our clients, this peak will be muted versus historic norms. Beyond 2022, we do acknowledge the potential for a continued softening economy.”
With September cargo volumes in decline and many retailers overstocked, trucking industry leaders anticipate a slowing fourth quarter. Instead of a pedal-to-the-metal run-up to Thanksgiving and gift-giving holidays, freight carriers and independent truckers are predicted to experience tamped-down workloads.
“Peak season this year just doesn’t appear to be much of an event. I’ll just say it like that, while we’re still experiencing growth,” J.B. Hunt president of intermodal Darren Field reportedly said.
Retailers bulked up their stockpiles of consumer goods during spring and summer as supply chains became bottlenecked. American spending habits were also robust as the pandemic waned and everyday people were flush with cash. But high inflation, fuel costs, and an uneven economic forecast appear to have reversed the spending spree. Working families are holding tight to their finances as heating oil and the cost of other necessities continues to rise. The economic shift has big box retailers in a difficult situation.
“We were holding kind of two winters’ worth of stuff in, like, August,” Aman Advani, co-founder and CEO Ministry of Supply, reportedly said. “Our fall-winter line, a lot of pieces arrived two months early. Our fall-winter line last year, a lot of pieces arrived six months late.”
Perhaps the most significant change has come in the spot market. Contract rates have reportedly only dipped from a high of $2.62 in February to $2.47 through September. By contrast, spot rates peaked at $2.70 in January and plummeted to $1.83 through September. The trend could lighten the workload of owner-operators and spot carriers through New Year’s and into the first quarter of 2023.
“We are expecting a muted peak season this year,” Knight-Swift Transportation Holdings CFO Adam Miller reportedly said. “Spot opportunities have declined significantly, and we have been pivoting towards making more commitments through the bid season to reduce our exposure in the spot market.”
Amazon projected a significant drop in sales through the fourth quarter. The e-commerce giant has already begun reconfiguring its massive warehouse and supply chain system to balance operational expenses against reduced consumer spending. Doorstep delivery competitors such as United Parcel Service have also reported declining volumes heading into what was previously the peak season. Although the freight transportation slowdown may be a source of consternation for some, the country still struggles with a truck driver shortage. Driving truck remains among the most secure careers and taking a holiday break may prove welcome.
Leave a Comment