The busy season for freight transportation hit earlier than usual this year. As a result, more truck drivers may be able to spend more time during the holiday season at home, as reported by The Truckers Report.
Hub Group, a transportation, logistics, and supply chain solutions provider, looked at past seasonal trends in comparison to what’s unfolded for freight and shipping this year.
“The fourth quarter is generally the peak of the holiday shipping season,” said David Yeager, chief executive of Hub Group. “However, judging by the feedback from our clients, this peak will be muted versus historic norms.”
Leaders of the trucking industry are preparing for a fourth quarter that is slower than usual. September began to hint at what the holiday season may hold as cargo declined and retailers dealt with an overstock of product. Workloads will be more relaxed throughout the Thanksgiving and pre-Christmas season, creating the possibility for truck drivers to enjoy more time at home with their families.
“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,” said Darren Field, J.B. Hunt’s intermodal president.
The U.S. economy has seen several shifts since the COVID-19 pandemic impacted spending, shipping, and saving habits in novel ways. Even two years after its onset, supply chain bottlenecks occurred in the spring and summer as retailers increased their stocks of consumer goods. Americans were happy to spend their money as most people had plenty of cash from the restrictions on services and traveling incurred by the pandemic.
But, as inflation rose, fuel costs increased, and the economy became uncertain, people have started keeping their money in their wallets and only spending it on the necessities.
“We were holding kind of two winters’ worth of stuff in, like, August,” said Aman Advani, co-founder and CEO Ministry of Supply. “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.”
The spot market hasn’t been immune to widespread economic changes either. In February, contract rates sat at $2.62; in September, they were at $2.47, a .15 cent decrease in seven months. And at the other end of the spectrum, spot rates saw a high in January at $2.70 before dropping to $1.83 in September. If these trends continue, both owner-operators and spot carriers could experience lighter workloads into 2023’s first quarter.
“We are expecting a muted peak season this year,” said Adam Miller, Knight-Swift Transportation Holdings CFO. “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.”
While the economy may be experiencing shifts, truck driving remains as one of the most stable U.S. careers. For many, a lightened workload going into the holiday season may be welcome.
