The last week in the freight market has been a whirlwind. There has been a spike in volume, a holiday dip, a capacity dip, a post-holiday hangover (volume + capacity dip) and — finally — a period of stabilization.
Retail sales were strong on the official kickoff of holiday shopping season, even setting a record for online shopping on Thanksgiving day ($3.7 billion).
Strong retail sales are expected to continue throughout the gift-giving season and will add volume to the freight network, which businesses expect this time of year. However, this holiday retail season is different than previous seasons. Here are three reasons why:
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- This year, Thanksgiving fell on the earliest day possible, making 32 total shopping days between Thanksgiving and Christmas. This will spread volume over a higher number of days, leveling out loads.
- With the rise of e-commerce and shorter shipping windows, consumers have been able to shop closer to Christmas day and still receive gifts in time to give to family and friends. This has become more common as free two-day and same-day shipping have become available. This year, traditional retailers like Target are betting on free two-day shipping which may compress the freight market in the final days leading to Christmas.
- Finally, the 2018 holiday season is the first since the shuttering of Toys “R” Us. This continues the shift in shopping preferences of consumers and impacts the amount of foot traffic to brick and mortar stores, while potentially increasing the volume of toys that need to move through the freight market this holiday season, especially in that shorter-window we discussed above.
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- WSJ: https://www.wsj.com/articles/as-retailers-spread-out-holiday-sales-congested-parcel-networks-catch-a-break-1543608589
- CNBC: https://www.cnbc.com/2018/11/27/cyber-monday-sales-break-record-a-record-7point9-billion-spent-online.html
- DAT: https://www.dat.com/blog/post/will-carriers-cash-in-on-the-holidays