What is Peak Season?

What is Peak Season?

It all boils down to supply and demand.

In many sectors, especially retail, the busiest time of the year is the run up to the Christmas period.

The priority is having as much product as possible to sell to meet targets and deliver a return to shareholders.

When is Peak Season?

The Christmas period begins in a lot of stores around October. Sea freight will take around 30 days to move from The Far East into the UK and most stores will be receiving stock one to two weeks prior to it being needed.

This means that the shipping lines will start to get busy between September and October.

There is a knock on with air freight that happens in September. As some of these orders will have had production delays which means the shipments get converted to air freight.

There may be a slight weakening of the ocean freight rates at this stage but it is rarely anything large as just after Christmas is Chinese New Year. This is the main holiday in China and most factories shut down for around three weeks. Production for most industries is usually pushed through to happen prior to this shut down.

In air freight large volume increases put a lot of pressure on the airlines as they are generally operating with the same capacity throughout the year.

The pressure only increases when certain products have performed better than expected and companies rush to ensure they have enough product to meet the demand, moving via air freight to replenish the best sellers.

The demand for air freight tends to reduce in December but volumes can still be quite heavy as they clear any backlogs built up during the busiest periods. However, the demand can pick up again during January, prior to Chinese New Year.

	Air freight peak season				Air freight peak season
Sea freight peak season
August	September	October	November	December	January	February

How Does This Impact Your Business?

From an ocean freight stand point it tends to be just around the rates charged for ocean freight. If the shipping lines have no capacity on the vessel the highest price gets the space. Peak season makes challenging as the shipping line may ‘roll’ some containers (rolling a container is when a shipping line has oversold capacity and some containers are left off the vessel and scheduled for the following one).

Air freight can cause a far greater issue to the importer. The rate increases, in the same way as it would for ocean freight. Some forwarders pass this increase on as a surcharge and others just add it to the freight rate. This is just one of the two main issues with air freight.

A lot of importers are consistently moving product on certain flights and base their supply chain on the transit times that they work with all year round. During the height of peak season there can be big delays. There have been times where airlines have a 7-10 day delay on getting goods onto a flight. Whilst in ocean freight if a vessel is delayed for a week it means around a 37 day transit time rather than a 30 day transit time, in air freight it can change a one day transit time into an eight day transit time.

What Can You Do?

Frustratingly there is very little that can be done during this period. Some peak seasons are worse than others with only minor increases and minor if any delays. Others can see freight rates nearly double and the delays becoming severe.

In both instances the key here is in the communication.

At FSC Oceans we have handpicked our network of partners and owned offices. We have consistently high levels of communication throughout the year and regular market discussions to try to predict very unpredictable situations.

We have excellent relationships with shipping lines and airlines allowing us space protection when it is available and exceptional service when it is not.

We work closely with our clients to ensure we are aware when their orders are due to be ready and their needs and we ensure we keep them fully updated throughout the whole process. This relationship is formed from the trust we build up from the moment we start working with them and whilst some issues can’t be avoided they can always be managed well with the right business partner.

Feel free to get in touch should you require any further information: Contact Us