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New Flexport research takes a deep-dive into the nature of seasonality in supply chains in light of the many disruptions of the past three years in the context of the prior 10 years. This post provides a broad overview of the report.
Economic activity does not grow in a straight line. In addition to expansion and contraction, some industries and goods show strong seasonality. The height of the seasonal activity is referred to as peak season, with the timing depending on industry and geography.
Some peak seasons are well defined and anchored to a specific point in time, like fireworks as discussed in Flexport’s prior research, while industrial goods, for example, show fewer seasonal effects.
Seasonality can also shift in both phase and amplitude—something we’re seeing now in the shipping industry. This blog post summarizes a deeper peak season analysis from Flexport’s research team.
Figure 1 shows the average seasonality across four different stages of supply chains with sales, inventories, ocean shipping, and air freight. The chart—and others like it in this report—uses a baseline of 100 for January in each year for each datapoint, then takes the average for each month (e.g., March 2010, March 2011, March 2012 etc.) to create a notion of “average seasonality” in the 2010 to 2019 period.
Each component shows distinct seasonality in the period between 2010 and 2019. We see retail sales peak in December, inventories and airfreight in November, and ocean freight in September.
Subsequently, there have been a series of distortions to normal seasonality, including the pandemic starting in 2020 and logistics bottlenecks in 2021. In 2022, there may be challenges for shipments of highly seasonal products, for example toys, decorations, and winter apparel, due to elevated shipping times.
While there have been improvements in recent months, the average overall time was still 95 days in total (cargo ready to destination port departure) as of early July compared to 85 days at the same time in 2021, 50 days in 2020, and 47 days in 2019.
Unless timing continues its improvement and bucks the seasonal trend, ocean freight departures from Asia may need to leave earlier than before (e.g., November) to cover the peak shopping season.
Disclaimer: The contents of this report are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This report has been prepared to the best of our knowledge and research; however, the information presented herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.