• Shippers remain concerned about U.S. consumers pulling back on overall purchases, and looking for mid-range price retail merchandise in the 2024 holiday season, according to a new CNBC Supply Chain Survey.
• The peak freight order season for the holidays begins as early as June and the CNBC survey shows almost 80% of freight orders expected to be placed are middle price-point.
• The survey suggests a holiday season and consumer that will be relatively healthy, and U.S.-based companies importing slightly more items during this peak season than last year.

The latest shipping data is beginning to reveal what U.S. retailers expect from shoppers during peak season — a discerning U.S. consumer looking for deals and discounts in the mid-range price category, according to the exclusive CNBC Supply Chain Survey.

This is the time of year when most freight orders start to be placed to get ahead on inventory for back-to-school and holiday shopping, and the response from supply chain respondents to the survey suggests a healthy, if cautious consumer, and a holiday season that is shaping up to be within a normal range.

According to the respondents, based on the freight orders they are scheduled to move during peak season, U.S. companies will be importing slightly more items for the holidays this year as compared to last year.

The CNBC survey, conducted between April 16 and May 3, includes responses from the National Retail Federation, American Apparel and Footwear Association, United National Consumer Suppliers, CH Robinson, OL USA, ITS Logistics, Kuehne+Nagel, DHL, and Uber Freight, a subsidiary of Uber Technologies.

Almost 80% of current freight orders received for peak season are for mid-range price items, the survey shows. Similar to last year, respondents expect less consumer appetite for luxury and aspirational luxury items imported.

Noah Hoffman, head of retail logistics for C.H. Robinson, tells CNBC that the economy is at an inflection point with consumer discretionary spending.

"We're seeing that in clothing and jewelry, in electronics, and home and garden," said Hoffman. "Consumers have also become more value-driven in their shopping. Instead of going to one store and stocking up regardless of how much toilet paper is already stashed in the garage, they're trying to avoid a larger bill. They're buying tighter, not throwing as many impulse buys in the cart and shopping around for the lowest price." 

Participants indicated that they have received fewer orders for the transport of cheaper, promotional items, compared to 79% of those surveyed saying they are expecting consumers to shop in the middle-price-point space. A majority of respondents (69%) said they expect consumers to continue to search for discounts.

According to Hoffman, general leeriness among retailers continues.

"The past few years have made many shippers hypersensitive to the highs of the highs and the lows of the lows," he said. "They're wondering when the next shoe will drop – whether that might be geopolitical, new trade policy, or another physical disruption like the low water levels in the Panama Canal. But especially for retailers, they may wait to see how the economy shakes out."

The world's second-largest ocean freight company, Maersk, recently told CNBC it expected a "normal" peak season. "There's nothing that indicates that it would be a slower peak season or a bigger peak season," said Charles Van der Steene, president of Maersk North America, in a recent interview with CNBC. "We believe in normalized peak season. ... Depending on the industry that can be more skewed, of course, retailers more skewed than others in that latter half of the year."

Walmart's executive team said after its earnings exceeded expectations on Thursday that it is winning more with "higher income" consumers. "We've got customers that are coming to us more frequently than they have before and newer customers that we haven't traditionally had, and they're coming into a Walmart whether it's a virtual store online, or whether it's one of our physical stores," said CFO John David Rainey.

Despite the slightly higher volumes expected to be moved, and the marginally higher-price point items, participants are not bullish on a consumer buying binge, with 56% of respondents still concerned about a consumer pulling back later this year.

Walmart reported that while transactions rose 3.8% in its most recent completed quarter, average ticket was flat compared with the year-ago quarter. "Wallets are still stretched," Rainey said.

"Consumer spending has recovered from a winter slowdown — but a market turn is still possible later this year, and consumer spending is expected to dip this holiday season," said D'Andrae Larry, head of intermodal at Uber Freight.

"We will be moving more middle-market luxury goods," one survey respondent noted. "Think Home Goods versus Bloomingdale's."

Hoffman said this will drive competition on the shelves and between stores, and may make the data to-date incomplete in its read on where the consumer is heading.

A feared port labor strike could influence shipping

One of the issues in timing orders this year relates to fears of an International Longshoremen's Association strike at the East Coast and Gulf ports. The six-year contract of the ILA with the United States Maritime Alliance, which represents port terminal operators and ocean carriers on the East Coast, expires September 30.

The union set a cutoff date of May 17 for the local contracts to be agreed to so an overall master contract could then be negotiated for the largest union of port workers in North America. This was the opposite tactic used by the ILWU which negotiated a master contract first.

"As we prepare for peak shipping season, many anticipate another busy holiday season and are taking steps now to ensure that holiday cargo arrives on time and where it needs to be," said Jon Gold, vice president of supply chain and customs policy of the National Retail Federation.

"Brands are cautiously optimistic about the critical holiday season but are hedging their bets by bringing product in earlier and balancing their shipping between the East Coast and West Coast amid ongoing crises and fears of future crises," said Nate Herman, senior v.p. of policy at the American Apparel and Footwear Association. "During a time of such uncertainty, logistical challenges, and inflationary pressures it is vital for the [Biden] administration to make sure we don't see further disruption as a result of the ongoing East Coast labor negotiations."

Just two months ago, the fear of an ILA strike at the East Coast and Gulf ports had some logistics managers telling CNBC they were going to pull forward their peak season freight in June which would have been a month early to avoid any containers being stuck at the ports. Now, that planning has changed. The majority of those surveyed said peak season will be during the normal delivery of July and August. The reasons behind the reversal of this decision is based on the last strike was in 1977, when a work stoppage lasted 44 days, and the quiet nature of the negotiations.

The bulk of peak season is typically between July and August, with additional holiday season orders coming in September and October.

Not all logistics respondents agree on the timing for peak season orders this year.

"Right now, the 7,500 retailers we serve are trying to maintain a robust selection and a variety of SKUs, but at the same time trying to avoid holding safety stock because of the uncertainty of consumer demand in the coming months," Hoffman said. "We believe this could lead to a somewhat later than usual peak season, with retailers holding off on placing orders for the holidays."

Ali Ashraf, director of ocean shipping for C.H. Robinson, says the industry may see a lull in June, because shippers pulled freight forward as much as they could in advance of the Chinese holidays and carriers imposing higher rates on May 1.

"We expect it will pick up again in July, August, and September," said Ashraf. "How fast it picks up remains to be seen. "We do anticipate a strong ocean shipping season this summer. It's just a question of whether those retail orders for the holidays may be on the later side."

If retailers do hold off on holiday orders, Ashraf says they will have to account for longer lead times to receive their goods.

More trade is moving back to the West Coast

While the price point of products gives a good indication on the expected pulse of the consumer, for the logistics industry, the amount of freight moved is critical for generating revenue.

"The signs of recovery in the ocean market have been encouraging," Ashraf said. "Ocean volumes industrywide are up double digits so far this year, compared to last year when many shippers were still shedding inventory. Another indicator is that bookings are three weeks out now."

Based on U.S. port import volumes, more trade is coming in and also filtering back to the West Coast.

As a result of the West Coast push, Paul Brashier, vice president for enterprise accounts at ITS Logistics tells CNBC it is already starting to see congestion manifest at terminals at the Port of Los Angeles handling freight bound for the interior of the U.S. through the inland point intermodal rail.

"Between the survey and other data we follow closely, there will be a significant strain on rail infrastructure that is moving these diverted volumes to the U.S. East Coast," Brashier said. "It looks like for the first time in two years we may be looking at a traditional West Coast heavy volume retail peak season, though a little earlier in June and July."

A potential ILA strike, Panama Canal drought restrictions, and Red Sea diversions are all driving the increased volumes to the West Coast, according to the survey.

"As we gear up for the peak season, we are proactively addressing these challenges by diversifying our shipping strategies and increasing our reliance on rail networks," said Tim Robertson, CEO of DHL Global Forwarding Americas. "Our focus is on ensuring the integrity and responsiveness of our supply chain, even during high-demand periods."

For freight diverting away from the East Coast to the West Coast, the preferred mode of transport for moving back to the East Coast is rail (77%). This will be a boost for Union Pacific and BNSF, a subsidiary of Berkshire Hathaway, as well as trucking companies involved in the truck-to-rail or rail-to-truck strategy transloading.

Any increase in freight coming in would be welcome for trucking companies still embroiled in the freight recession. JB Hunt's Q1 earnings miss is just one example of how a pullback in manufacturing orders has hit the industry. 

Transloading, which was popular approach to moving freight, that combines both rail and trucking, during the Covid supply chain shocks, is expected to be an attractive strategy this peak season.

Larry said shippers need optionality to navigate unexpected crises.

Rail utilization is improving and remains near the five-year average, according to Uber Freight's latest market analysis. "Likewise, rail terminal dwell time continues to be down year-over-year. With the exception of the impact of weather events in January, the railroad networks have generally been free of delays and congestion," he said.