The peak shipping season has arrived once again, but this year, it may look a little different thanks to a freight recession caused by the lasting impact of the COVID-19 pandemic that's expected to last until Q3 2024. With an ever-growing driver shortage and an entire trucking company going bankrupt, capacity is going to be tight over the next few months.
For shippers facing these challenges and more this peak season, GlobalTranz has a vetted network of 75+ less-than-truckload (LTL) and 85,000+ full truckload (FTL) freight carriers nationwide as well as all the tools you'll need to find space for your shipments at top, pre-negotiated rates. Read on to learn more about the 2023 freight recession and to discover how GlobalTranz shipping solutions can help you navigate the complexities of this year's peak shipping season.
COVID-19 Still Affecting Peak Shipping Season
Due to the COVID-19 pandemic, retailers, manufacturers and carriers faced unprecedented supply and demand challenges, resulting in continued issues that have lasted throughout the last few years.
COVID-19 marked an unmatched period of consumer spending that forced retailers to ramp up their inventory to match demand. When this period of spending abruptly ended, those same retailers were left with too much product on the shelves with no way to sell it. Big box stores that were able to start destocking early by selling goods at a discounted rate or by consigning them to liquidators are just now starting ordering again, and many retailers have put off purchasing holiday inventory until recent months. That's a full quarter later than typical peak seasons.
On the other hand, manufacturers are facing shortages on imported parts. China, especially, has had a very slow recovery from the pandemic, leading to shortages on many of the parts and supplies American manufacturers rely on to produce goods. To top that off, air freight carriers limited their services when overseas orders slowed down, forcing manufacturers to wait longer for ocean freight shipping, leaving their trucks empty for longer periods between shipments.
This pause in shipping caused by the pandemic left freight carriers with their own challenges. As business boomed during the pandemic, carriers wanting a larger piece of the action invested in more equipment and hired more labor. Now, with slowing consumer purchases, truck drivers concerned over the freight recession are leaving the business or retiring early. To compensate, carriers hired less-experienced drivers at higher rates, sold parts of their fleet or set them aside for future usage. Larger carriers are experiencing disruptions with shrinking demand and increasing labor shortages and some carriers even closed their doors entirely.
The Effects of a Current Freight Recession on Shippers and Carriers
The words "freight recession" can seem very intimidating, especially when you know all the challenges a capacity crunch can bring. With fewer trucking companies — and fewer trucks — on the road, shippers may have to pay higher prices for guaranteed services. But did you know that shippers may actually benefit from this state, as freight carriers will be more willing to negotiate lower prices for more business? That's why it's important to work with a trusted third-party logistics (3PL) provider like GlobalTranz that has access to and relationships with a variety of freight carriers, making it easier for you to secure transport for your goods.
It's also important to keep an eye on trends and react quickly should anything change in the coming months. If consumer shopping recovers late this year, like in late October, shippers may pay higher prices for reduced capacity. The global economy is cyclical, meaning tables could turn at any minute, though the state of the industry is unlikely to shift until Q3 2024.
Freight Shipping in a Recession
Although shippers may benefit from freight rates during a freight recession, carrier capacity will be difficult to find. That's where a reliable 3PL like GlobalTranz can help! With a 3PL as part of your peak season shipping team, you'll have immediate access to a network of LTL and FTL carriers through the 3PL's transportation management system (TMS). You can compare rates, select the equipment needed to move your freight, and choose a freight shipping option that fits your budget and timeline.
GlobalTranz: Your Partner for a Successful Peak Shipping Season
Whether you're shipping LTL or FTL freight this holiday season, GlobalTranz has the tools, resources and freight carrier connections you need to make this peak season a success. While going into peak season during a freight recession and capacity crunch is not ideal, partnering with GlobalTranz will allow you to instantly access a network of trusted, pre-qualified carriers to help get your shipments where they need to go without breaking the bank.
Request your free consultation to learn more about how GlobalTranz can transform your shipping this peak season and beyond.