Higher gift card sales to impact peak season

Holiday freight demand is likely to persist into early 2022 as shoppers opt to buy more gift cards after struggling to find the products they want, a transportation executive said.

In a recent conference call, Shelley Simpson, chief commercial officer of Lowell-based carrier J.B. Hunt Transport Services Inc., said increased gift card purchases would contribute to higher post-holiday sales and freight demand to replenish inventory. The freight demand increase could continue into the second quarter of 2022, she said.

Also, Simpson said the freight bottlenecks at West Coast ports are likely to intensify capacity constraints throughout the holiday shipping season, or peak season.

“If you go to the shelves today at the store, many of those are empty, and we’re hearing that directly from our customers,” Simpson said. “They are somewhat surprised as to what’s happening in peak, and we are as well. It’s pushing peak longer into November and December, and that will make for more replenishment in the first quarter and even into the second quarter of next year.

“We do believe the first quarter will be unusually stronger than it has been in … a more typical environment – really trying to get those shelves and inventory in the right places and the right times,” she added. “Demand from that perspective is still there.”

Without the right products on store shelves, Simpson expects increased gift card sales this holiday season. This would lead to more shopping and retail sales in January and a greater need for the carrier to replenish the goods, she noted.

J.B. Hunt recently reported net income increased by 59.2% to $199.83 million, or $1.88 per share, in the third quarter, from $125.5 million, or $1.18 per share, in the same period in 2020. Revenue rose 27.2% to $3.14 billion, from $2.47 billion.