Christmas rush gripped logisticians earlier this year

Although there is still a long way to go before Christmas or November sales such as Black Friday from a consumer perspective, the TSL industry is already starting to feel the Christmas rush. The most dynamic situation is in sea freight. This year, it is not only the distance to production markets that matters, but also the issue of supply chain security. We are seeing a shift of about two weeks from the freight peaks to which we are accustomed. Whats 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 EUs largest import partner next to the UK and the US. According to Eurostat, China accounted for 20.5 per cent of EU goods imports in 2023.

But how about rail from China to Poland?

A consequence of the situation in the Red Sea is also a greater interest in rail transport. This is influenced both by the longer transport time by ship and the costs. Over the last six months we have seen comparable prices for sea and rail freight, which has further encouraged customers to choose the latter option. Currently, ship freight rates are falling, which may result in mainly urgent cargoes being transported by train. Nevertheless, the blockade of the Suez Canal has meant that there are some companies that have permanently included rail in their portfolio of freight options due to building resilience in their supply chains. Despite the drop in sea freight rates and I think that even after the reopening of the said route, they will continue to transport part of the volume by rail. In addition, there is great potential in the Central Corridor, leading from China to Europe via Central Asia, the Caspian Sea and the South Caucasus, thus 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 due to the need to reduce the carbon footprint.

Savvy customers are already planning their air freight before Christmas

Air shipments usually begin their journeys in late October and early November. This year, however, as with sea freight, we anticipate a postponement of this date due to customers caution and their desire to secure their supply chains. This is particularly true 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 per cent 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 stabilising, 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 impacted by the Chinese Golden Week (1-7 October). During this time, as during 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 traffic. However, the logistical interconnected system will certainly react in due course.

Warehouses are also bustling before Christmas

Bringing in goods well in advance naturally leads to an increase in interest in contract logistics, as we are currently seeing. Warehouses are also bustling ahead of Christmas or Black Friday with additional services. Many companies from various industries are interested, for example, in putting together special occasional product kits or creating stands that later attract consumers in shops.

Uncertainty as the norm in logistics

Consumption in our country is steadily increasing, although, as recent market research shows, consumers are carefully reviewing their budgets, not least in view of inflation and, for example, 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 characterised by much higher volumes than capacity, which translated into congestion and delays. Last year, the situation was quite the opposite. Therefore, looking at the past, it is difficult to draw conclusions about recurring trends. Every year is different. During this years holidays, we transported significantly more volume than in the same period in previous years, which was due to both the aforementioned 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 not start to weaken already in the last quarter?