[Air Freight Takes Off] Early Signs Point to Busy Peak Season

Peak season is typically a busy time for air freight, but this year, things are shaping up to be particularly hectic. Several factors are converging to create a potential record-breaking season, with some experts predicting tight capacity and rising costs.

Key Drivers of the Air Freight Frenzy:

• Ocean Port Gridlock: Shippers are struggling to secure containers and facing delays at congested ports, particularly in the Middle East. This is pushing them towards air freight, despite the higher cost.
• E-commerce Juggernaut: The ongoing boom of e-commerce, especially from China, is putting a strain on air freight capacity. Chinese e-commerce giants are reportedly pre-booking flights, further limiting availability.
• Early Bird Retailers: Retailers are moving their peak season planning earlier to avoid stockouts and meet holiday demand. For instance, one of ProShip's enterprise cosmetics retail customer is moving their code freeze line up into September and a leading retailers and sports retail customer is moving up peak forecasting.

What Industry Experts Are Saying:

• Brace for Surcharges: Ocean carriers are expected to implement peak season surcharges earlier than usual, adding to overall freight costs.
• Explore Alternatives: Shippers may want to consider using slower ocean shipping methods or offering deferred delivery options to consumers to manage costs.
• Air Freight Capacity Uncertain: While some air freight companies may add capacity, a cautious approach is likely due to concerns about a potential economic downturn.

Consumer Behavior and its Impact:

• Price-Conscious Consumers: Consumers are becoming more price-sensitive and may be willing to wait for sales or discounts rather than pay premium shipping costs.
• Demand Elasticity: The question of whether demand for certain goods is elastic (easily substitutable) is being raised. If consumers are willing to switch to alternative products, it could impact overall shipping needs.

Navigating the Air Cargo Turbulence:

The coming peak season presents a complex challenge for shippers. Here are some key strategies to consider:

• Multi-Carrier Shipping Software: A robust multi-carrier shipping software can be a game-changer. It provides real-time visibility into rates and capacity across various air freight carriers, allowing you to compare options and secure the most cost-effective solution for your needs.
• Promote Holiday Sales Early: Try to push holiday sales earlier in the year by promoting early holiday shopping discounts. This can help alleviate intense volume spikes during "true" peak season, where capacity is at it's smallest and delivery delays are at a high.
• Strategic Inventory Management: Carefully evaluate your inventory levels and consider pre-ordering critical items to avoid stockouts during peak season. However, be mindful of potential changes in consumer demand to prevent excess inventory.
• Communicate Clearly with Consumers: Transparency is key. If you anticipate potential delays due to air freight constraints, communicate this clearly to your customers. Consider offering flexible shipping options with transparent pricing to give them control over costs and delivery times.

Special thanks to Dave Salter , William Carver , Will Hennessy , Mike Stoessel , Dan S. , Jeffrey Lukaszewski , Bill Schroeder , Rob Murphy , Miranda Dowler , Joe Lowrey , and ?Jerri D. for their insights.

The air freight market is poised for a busy and potentially challenging peak season. By being proactive in your planning and utilizing expert resources like ProShip's blog , exploring all options, and leveraging the power of multi-carrier shipping solutions , you can navigate the turbulence and ensure a successful holiday season. Let us know in the comments below: What are your thoughts? What do you see coming?