How Is The Holiday Season Expected To Affect Shipment Volumes?
The holiday season is the busiest time of year for shipping companies, as they are expected to get a large volume of shipments delivered to consumers just in time for holiday celebrations.
This year, the holiday shipping season is shorter than usual, with only 27 days between Thanksgiving and Christmas – five fewer shopping days compared to 2023. This means there are only 17 business days to deliver shipments – a tight schedule for such high demand.
A Higher-Than-Usual Shipment Volume Expected This Year…
There’s no doubt that the holiday season will put a strain on shipping and logistics to meet the increased demand.
Retailers expect a strong consumer demand, mainly driven by the rise of e-commerce, where more and more people favor home delivery over store shopping.
According to Transport Topics, U.S. shoppers are expected to spend $270.8 billion online in November and December – an 8.4% increase from last year.
Every year, businesses are faced with challenges in delivering packages. Particularly with winter weather conditions causing delays. However, the logistics industry is seeing an even more significant challenge for the 2024 season.
Due to concerns about port strikes and supply chain disruptions, many companies opted to have their holiday inventory arrive earlier than ever this year, with many products arriving in June.
The East and Gulf Coast port strike lasted three days in October and it took weeks to return to normal freight operations. However, congestion on the West Coast has been a lasting repercussion of the strike.
Before the peak season, e-commerce giant Amazon urged its sellers to meet an Oct. 19 deadline for third-party sellers’ inventory to reach its fulfillment centers to ensure delivery speeds for Black Friday, making sellers ensure they are prepared, too.
The deadline was a week earlier than last year – another way the shortened season has affect shipping volumes. Nonetheless, due to the high demand, Amazon is experiencing tight capacity at its West Coast facilities.
Amazon is rerouting the shipments to other regions to relieve capacity, with either sellers paying a fee for Amazon to distribute the products or sending the inventory to multiple locations themselves to avoid the fee.
If third-party sellers do it themselves, Amazon will provide added incentives. In doing so, shippers could mitigate their exposure to delays related to the e-commerce giant’s operations.
Another option for shippers is to use parcel carriers for inbound shipping, which could lead to more costly transportation expenses.
FedEx and UPS have introduced higher surcharges for the peak season, as both anticipate a volume surge – meaning shippers will face higher fees per package.
These surcharges cover the extra costs and higher transportation expenses that come with the peak season. Depending on the type, surcharges range from $0.30 to $8.25 per package among some carriers. These surcharges will last until mid to end January 2025.
UPS expects “the highest volume ever in our network” on Dec. 18, when consumers are finishing up their holiday shopping.
The shipping industry has steadily prepared for the holiday shopping season and the extreme volume of deliveries that have already started to take place.
However, there may be some delivery delays due to the recent events that have shaken up the transportation and logistics sector in both the U.S. and Canada.
As a consumer, to help ensure packages arrive at your front door in time for all the celebrations, place any orders you have now if you have yet to do so.
During the holidays, it’s always a smart idea to place any orders ahead of time, but due to the increased shipping volumes expected this year, it’s crucial.
