Thanksgiving: 3 Reasons We’re Thankful For Freight

At their first Thanksgiving meal in 1621, pilgrims and local tribes members dived into a turkey and pumpkin pie, caught a football game and woke up early the next day to catch some Black Friday sales. Well, no! Not even the turkey and pumpkin pie part. In fact, Thanksgiving Day wasn’t even regularly celebrated until 140 years later.

When even traditions change, it’s safe to assume that everything else can change too. So here are three  changes that freight has given to us on Thanksgiving.

1: Cheap freight made Black Friday what it is

Following Thanksgiving up with a day of heavy retail promotions goes back at least to the 1930s. Like now, retailers saw the benefits of heralding in the Christmas shopping season (and possibly more foot traffic in the stores).

The retail frenzy has spread over time. Promotions now start the beginning of Thanksgiving week, and spread out to “Cyber Monday” and beyond. It has also spread geographically. Retailers in at least a dozen other countries have now got into the act. Countries with no cultural connection to Thanksgiving – like Romania.

And it stems from the development of the global economy (freer trading, cheaper production, cheaper freight), with consumers in many countries who can now afford to spend for the fun of it.

2: Freight rates are cheaper this year

If you’re into logistics, you’ve watched international freight costs plunge over the past year. We wondered whether this could mean even better bargains being offered this Black Friday. So we checked out what experts were picking as best bargains. BlackFriday.com flagged Best Buy’s $149.99 sale price for a 49-inch Toshiba HDTV.

Freightos’ bread and butter is providing instant online freight quotes from our website. So we checked what the freight costs are for shipping a container of those TVs from Shanghai to Long Beach. The result – about $7 per TV set. Last year, freight prices would have cost $12!

That $5 savings per unit is more like small change for the consumer, not a discount. The $12 freight cost was reason enough to be thankful. But spread that $5 savings per unit over many FCLs and you’re talking about a huge change for large shippers. Maybe not enough to mark TV sets down by $1,200 though!

As for air cargo rates, The Loadstar contends that although they are well down on this time last year, e-commerce may be changing that. In e-commerce delivery, meeting customer expectations is fundamental, even during surges like Black Friday. And the e-commerce surge season now extends from Singles Day in early November through to Chinese New Year in early February. This has been good news for Asia-Europe air cargo, where the additional demand is lifting air cargo rates up, although they still have some way to go to reach last year’s rates.

3: Freight helps stem the online tide

Brick and mortar stores have been under pressure for some time now from online shopping. Sure, there are plenty of online Black Friday specials and online sales are growing (nearly a 15% growth in Q1 this year alone).

So while prices for importing goods from China to the US are rock-bottom, like the $7 dollar TV, if a company needs to pay another $50 out of pocket for UPS or FedEx delivery, that’s eating into the bottom line. Using door-busters to drive foot traffic into the store is another way store owners can benefit from low freight rates without getting hit with courier charges.

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