Peak shipping season: Here’s how it affects you
The holiday season approaches and while many people are planning to get ahead of the rush, those in the shipping and logistics industry are already in the thick of it.
Peak season for the industry happens around August to October. The bustle surrounding this period is a combination of retailers stocking up for back-to-school purchases and the upcoming busy holiday-shopping period.
The result of this? Primarily, delays at ports and higher shipping costs, said Shara-Kay Kinlocke, chief operating officer of Gateway Shipping Jamaica.
Though ‘peak’, as it is simply referred to by many, is an annual occurrence, the effects of the pandemic have added further considerations to the already-hectic time created by the container shortage, which caused freight rates to soar over the past year.
For shipping companies, retailers and their customers, these and other ensuing increases are almost unavoidable. “The higher rates are driven by increased demand for cargo space by importers,” Kinlocke said, adding, “When shipping volumes exceed container line capacity, the highest bidder often gets the space.”
At the onset of the pandemic in early 2020, many manufacturers cut production in keeping with slowing demand. Now that most economies are reopening and learning to adjust to the coronavirus, consumer demand has surged. Shipping companies are battling to keep up with new orders and clear the bottleneck from before, made tougher when a container ship blocked the Suez Canal and obstructed the passage of hundreds of ships on both sides of the busy seaway.
To make matters worse, it is projected that the current peak season will extend beyond the traditional time frame, producing more problems in the logistics supply chain.
Research and analytics firm Sea-Intelligence, in a recent report, revealed, “The fourth-quarter capacity outlook also indicates an extension of the peak cargo season into Q4, as carriers are currently scheduled to deploy even more capacity in the fourth quarter than they did in Q3.” It noted that this is an “unprecedented development,” with the peak cargo season normally beginning to taper off around this time, with a drop in demand pushing carriers to also reduce capacity.
However, all is not lost, and importers and retailers can get ahead with adequate preparation, Kinlocke said. “As delays are expected during this period, it’s always best for importers to ship as early as possible to account for these delays.”
She continued, “While it may not be practical in some instances, utilising more than one shipping line may be useful in mitigating delays and providing flexibility.”