Peak Shipping Season Came Early This Year… Why?

Peak Shipping Season Came Early This Year… Why?

peak shipping

According to the Wall Street Journal, container imports at two of the largest ports in the United States – Los Angeles and Long Beach, California – have jumped 8.4% compared to the same time period last year. While “Peak Shipping Season” generally happens in late August/early September, this year it came early.

The question is why.

If you are paying attention to the geo-politics of trade lately, you probably already have a pretty good guess.

As has been reported extensively over the last year, fears over trade tensions between the United States and China (as well as Europe) have been increasing. It’s clear that this early peak in shipping has come as a result of these lingering fears.

peak shipping season

Courtesy of Freightos: The regular GRI trend was broken in August, because prices continued to increase over 15 days

Trade Wars & Tariffs

As we continue to edge closer to a full-on trade war (though we are seeing some positive signs of a possible lessening of tensions) – we have already seen announcements of hundreds-of-billions of dollars of tariffs – shippers clearly feel that “front-loading” their shipments before these tariffs go into effect.

Rising Costs

In a climate of already increasing shipping costs, an early “peak-season” is probably not a welcome development for shippers. In the last year, shipping costs have risen 20-30% , coupled with the fact that, generally speaking, costs during peak shipping season can increase from their baseline by an average of 10-20%. Given the overall increase in shipping costs over the last 12 months, we could theoretically be talking about 50% increase of shipping costs as compared to the average of 12 months ago.

Increasing Need for Freight Audit

Research has shown that up to 80% of all freight invoices contain some sort of dependency. Additionally, freight charges can represent up to 10% of a company’s total expense. As a percent of a total invoice, freight discrepancies can make up as much as 9% of the total invoice.

Without a robust freight audit, shippers stand to lose an incredible amount on their freight costs. As we have now entered an early peak shipping season, as well as the overall increase in shipping costs, shippers have never had more of a reason to invest in a better freight audit solution.

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