How will ‘Shipageddon’ impact trucking?
“Shipageddon,” a new industry buzzword, refers to a potentially chaotic struggle between the forces of supply and demand during the holiday selling season.
Here’s a snapshot of what’s happening:
Consumer spending is on a roll. According to a new economic report from investment bank Jefferies, ““The summer and fall stages of the U.S. recovery have been marked by incredibly strong retail and housing sales, which have both surpassed pre-COVID levels by a wide margin.”
Business inventories are historically low. The remarkable rebound of the U.S. economy caught producers, retailers and homebuilders off guard. Retailers, in particular, are struggling to replenish their stocks. As the holiday selling season begins, inventory-to-sales ratios are at historic lows.
Imports are surging. Trans-Pacific shipping capacity is virtually sold out into January. Consequently, spot rates for containers from China to West Coast ports have soared.
If Shipageddon happens, it could mean major disruptions for U.S. supply chains.
UPS and FedEx have warned customers to expect capacity shortfalls, the Wall Street Journal reported. This could result in delayed delivery of 7 million packages a day between Thanksgiving and Christmas.
Delays and bottlenecks won’t be limited to parcel deliveries. Ports are jammed with imports. As businesses try to stock up for earlier holiday sales and new home construction, maximum levels of freight will require trucking from the ports and warehouses to destinations across the country.
To make matters worse, in the midst of a nationwide shortage of drivers. the pandemic has closed one-fourth of truck driving schools—and those that remain opened have curtailed their enrollment for social distancing reasons.
It will take a lot of creativity for shippers and carriers to meet high demand for trucking freight and drivers. AJC Logistics stands ready to help you navigate this extremely challenging period. Whether you’re trying to move consumer goods from West Coast ports or produce and refrigerated products to stores around the country, let our team put their expertise to work for you.
