A lengthy freight recession appears to be winding to a close, brought on by an early start to the peak shipping season for retailers, according to figures from Motive, which tracks trucking visits to North American distribution facilities for the top five retailers.
The peak shipping season usually starts in July and August and runs through the early fall, as consumers begin buying products for back-to-school season and the holidays. Suppliers will then start shipping higher volumes to retailers accordingly to account for the higher demand. But with concerns over transit delays in the Red Sea and the looming threat of an East Coast and Gulf port longshoremen strike in October, retailers began restocking their shelves a month early in June.
“When I look at the trends, what is pretty clear here is compared to last year, where retailers were destocking so they were artificially not bringing in inventory, we now see strong restocking trends,” Hamish Woodrow,
head of strategic analytics at Motive, told CNBC, citing a 30% year-over-year increase in trucking visits to North American distribution centers for the top five retailers in June. Motive also tracked year-over-year order increases in June across a variety of retail sectors, including brick-and-mortar apparel and electronics stores (33%), home improvement (24%), grocery stores (22%) and discount wholesalers (13%).
This added volume has helped the trucking industry begin to recover after struggles dating back years, when pandemic-era surpluses at retailer distribution centers led to a downturn in deliveries. Since trucking companies get paid per load delivered, some were forced to shut down altogether, including Jeff Bezos-backed Convoy and freight trucking giant Yellow. Now, Woodrow believes that the lengthy freight recession will likely end by the third quarter of 2024 thanks in large part to the longer peak shipping season.
