[170321.EN.BIZ] Shift in Peak Shipping Periods With Booming e-commerce: TPM21

 

CHANGES in buying patterns in the US that may be permanent as a result of soaring e-commerce volumes amid the Covid-19 that has affected the timings of shipments could shift the traditional peak import periods.

This was the message at a recent session of the JOC's virtual TPM21 conference from industry veteran, Ron Widdows, CEO of FlexiVan Leasing, an intermodal chassis-owning specialist based in Scottsdale, Arizona.

He pointed out that there have been fundamental changes in consumer spending as a result of the Covid crisis, and those changes will need to be factored into US supply chains.

"There are indications the strength of the flow will continue through the first half of the year. For example, we have large customers looking at year-over-year growth of 25 to 30 per cent. We have customers already ramping up to their peak volume in home improvement, with volume at the same level as the peak period in 2020," Mr Widdows said.

While the emergence of e-commerce in a significant way has changed demand patterns, it is also driving development in merchandising, warehousing, and distribution.

"Right now there is an explosion in the development of distribution centres, as many traditional retailers now need fulfilment capability because they have shifted to more of an e-commerce model.

"Those changes will cause differences in the timing of peaks, with differences between the slack and the peak season, and that is going to keep some stress on assets, and certainly on things that are most obvious to shippers, such as ship space, chassis availability, truck power and the ability to move their goods through their networks."

The networks are under severe pressure, with the ports of Los Angeles-Long Beach heavily congested and the volume overwhelming the inland logistics chain. Those conditions were unlikely to improve in the short term, Mr Widdows said.

"This year will be all about volatility," he said. "This year the stress of the networks will easily continue through the first quarter, and some believe through mid-year, and all of this has something to do with the economic stimulus and to what degree that has an influence on the market."

Source : HKSG / Photo : Transport Topics.