Understanding Seasonal Freight Trends: How nearshoring can help overcome seasonal challenges

Within the world of logistics, things like agricultural cycles and consumer spending can cause extreme fluctuations in freight volume. It’s important that logistics companies, especially third-party logistics providers, understand how to navigate these seasonal changes to ensure efficient operations and maintain customer satisfaction. But with tight budgets and short deadlines, it can be challenging to manage market changes, especially during high-demand periods when capacity is stretched thin.

Understanding the ins and outs of freight seasonality and developing strategies that will help you navigate seasonal fluctuations is essential. Nearshoring is emerging as a popular solution to provide flexible staffing, improved operational efficiency, and cost-effective solutions.

The Four Seasons of the Freight Market

We often think of the freight market in four seasons: an early quiet season, produce season, peak season, and holiday season. Each season has its own challenges related to capacity and rates, and logistics companies must develop a strategy to help them navigatethe changing seasons.

Quiet Season: January –March

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After the holiday rush in November andDecember, freight activity is typically slower at the beginning of the year.This is tied to consumer behavior, lower demand for goods, and adverse weather conditions that can cause delays in shipping. Shippers and carriers experience less freight volume, and shipping rates tend to be lower. Consider this season a time for planning and preparation for the upcoming busy periods.

Impact on the logisticsindustry and 3PLs:

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·     Lower demand fortransportation services

·     Reduced shipping ratesand available capacity

·     Opportunities to optimize operations and prepare for future seasonality

Produce Season: April –July

Freight activity begins to pick up late spring into summer as a variety of produce are in season. Due to the perishable nature of produce, there is an increase in demand for refrigerated trailers and rates tend to rise with higher demand for specialized equipment.

Impact on the logistics industry and 3PLs:

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·     Increased demand for refrigerated trucks and specialized equipment

·     Tighter capacity and increased rates

Peak Season: August –October

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As the year progresses, this is one of the busiest times for freight. Companies ramp up production to meet increased consumer spending coming from back-to-school needs and the upcoming holiday season, leading to increased demand for freight services and higher shipping volumes and rates.

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Impact on the logistics industry and 3PLs:

• High demand across various sectors, specifically retail
• Tightened capacity and steep rates
• Supply chain delays
• Increased demand for value-added services, such as     warehousing and final-mile delivery

Holiday Season: November –December

The end of the year brings another spike in consumer spending around the holidays. Carriers are in high demand, and rates are high due to the rush to move goods in time for the holidays.

Impact on the logistics industry and 3PLs:

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·     Need for quick and reliable delivery

·     Increased e-commerce sales and demand for final-mile delivery

·     Limited capacity and increased shipping rates

·     Adverse weather conditions can cause additional delays

Alleviating seasonal challenges through nearshoring

Nearshore staffing — hiring or outsourcing teams in nearby countries — is a valuable strategy for logistics companies looking to manage the ups and downs of freight seasonality. It offers scalability, cost-effective labor, better customer service, and enhanced operational efficiency, especially during peak periods.

Cost-effective workforcescalability

By tapping into talent in neighboring countries, 3PLs can supplement their existing teams with additional workers to handle the increased workload. And during quieter periods, like January throughMarch, nearshore teams are more cost-effective than maintaining an overstaffed local workforce.

Efficient operations

During peak freight seasons, speed and responsiveness are crucial. Nearshore teams can assist with back-office and administrative tasks, allowing local teams to focus on strategic growth-focused responsibilities. This division of labor helps reduce delays and improves overall efficiency during peak times.

Improved customer service

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Nearshore staffing provides additional customer service representatives to handle the increased volume of questions and shipment tracking inquiries during busier seasons. Plus, nearshoring to countries in similar or nearby time zones can help you manage spikes in demand without delays in communication with your local workforce or customers. This helps maintain high levels of customer satisfaction, even when local teams are stretched thin.

Partner with Rapido for seasonal challenges

By incorporating nearshore staffing into your seasonal strategy, you can deliver faster service and better meet customer expectations year-round. At Rapido, we connect US-based logistics companies with top talent in Mexico. Get in touch today to learn how Rapido can help alleviate the challenges of freight seasonality.