New Articles

Christmas Rush has Gripped Logisticians Earlier this Year

global trade christmas

Christmas Rush has Gripped Logisticians Earlier this Year

Although from a consumer perspective, there is still a long way to go before Christmas or November sales such as Black Friday, the TSL industry is already starting to feel the Christmas rush. The most dynamic situation is in sea freight. This year, the importance lies not only in the distance from production markets but also in the resilience of supply chain. We are seeing about a two-week shift compared to the peak shipping periods we’re used to. What’s more, some have started transporting Christmas shipments as early as June. The reason for this is the blockade of the Suez Canal. Ships take a circuitous route around Africa, which extends transit time by precisely 10-14 days. Christmas or sale goods, including electronics, textiles, ornaments and toys, arrive mainly from China, which is the EU’s largest import partner next to the UK and the US. According to Eurostat data, China accounted for 20.5% of EU goods imports in 2023.

Read also: Road Freight Prices Rise unexpectedly in the Lead up to Christmas, Increasing in November for First Time Since 2019

But how about rail from China to Poland?

A consequence of the Red Sea situation is also a greater interest in rail transport. This is influenced by both the longer transit time by ship and costs. Over the past six months, we have seen comparable prices for sea and rail freight, which has further encouraged customers to choose the latter option. Currently, sea freight rates are falling, which may result in mainly urgent cargoes being transported by train. Nonetheless, the blockade of the Suez Canal has meant that there are some companies that, for the sake of building resilience in their supply chains, have permanently included rail in their transport options portfolio. Despite the drop in sea freight rates and I think that even after the reopening of the aforementioned route, a portion of the volume will still be transported by rail. In addition, there is great potential in the Middle Corridor, leading from China to Europe via Central Asia, the Caspian Sea, and the South Caucasus, bypassing Russia. Due to the complexity of this route, the best solution there is intermodal freight, which, incidentally, is also becoming increasingly popular in pan-European transport.,  largely driven by the need to reduce the carbon footprint.

Cost-conscious customers are already planning air transport before Christmas

Air shipments usually start their journeys in late October or early November. However, this year, similar to sea freight, we anticipate a postponement of this date due to customers’ caution and their desire to build resilience of their supply chains. This is especially relevant in South Asia, where, unlike in China, air freight is the only alternative to the sea option. Decisions to transport goods by air earlier will also be dictated by the natural process of changing the route network from summer to autumn/winter, which will result in an approx. 10% decrease in the number of services and therefore a reduction in capacity. In the context of South Asia, mention should be made of the unstable political and social situation in Bangladesh. Numerous riots in July and August led to blockades of ports, airports, and land transport routes. This has implications for supply chains, especially in the important garment industry for this market. The situation is currently stabilizing, but as a consequence of these demonstrations, local authorities have introduced a number of restrictions, including increased controls at borders and key transport points such as airports and seaports. All this also affects the efficiency of supply chains.

It is also worth noting that the increased demand for the aforementioned global freight is also significantly influenced by the Chinese Golden Week (1-7 October). During this time, similar to the Chinese New Year, the economy in the Middle Kingdom slows down significantly, so customers plan the delivery of their goods well in advance.

Road transport, due to its relatively short distances, is at the latest starting to feel the pressure of the upcoming autumn-winter shopping season. At this point, it is still too early to talk about an increase in . However, the logistical system of interconnected vessels will certainly react in due course.

Warehouses are also bustling before Christmas

Bringing goods in well in advance naturally leads to an increased interest in contract logistics, as we are currently seeing. Warehouses are also bustling ahead of Christmas or Black Friday with value-added services. Many companies from various industries are interested in, for example, assembling special promotional product sets or creating display stands that later attract consumers in stores..

Uncertainty as the norm in logistics

Consumption in Poland is steadily increasing, although, as recent market research shows, consumers are carefully reviewing their budgets, not least in view of inflation, and, for example, are spreading Christmas spending over two months. As a result, manufacturers and importers are trying their best and fastest to prepare for the increased Christmas traffic. Undoubtedly, the challenge is that recent years have taught us that the only constant in logistics is unpredictability, as exemplified by the aforementioned crises in the Red Sea or Bangladesh, or earlier, the coronavirus pandemic.

Two years ago, traffic peaks around Christmas or Black Friday were characterized by much higher volumes than capacity, resulting in congestion and delays. Last year, the situation was quite the opposite. Therefore, looking at the past, it is difficult to draw conclusions about repeatable trends. Every year is different. During this year’s holidays, we transported significantly more volume than in the same period in previous years, which was due to both earlier-than-usual dispatching of sale goods and a slight upturn in the economy. However, many economic indicators now show that we can expect a slowdown from September onwards. This raises the question: will the market already begin to weaken in the last quarter of the year?