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Hurricane Harvey to disrupt nearly 10% of U.S. trucking

BLOOMINGTON, Ind. — Hurricane Harvey has and will impact the trucking industry in the U.S. in a big way, FTR reported today.

FTR has quantified preliminary numbers, gauging the impact in the overall trucking market. Hurricane Harvey’s broad swath across Texas will strongly affect over 7% of U.S. trucking, with some portion of that fraction out of operation for two weeks.

During the first week, almost 10% of all U.S. trucking will be affected. That number jumps near 100% for the Gulf Coast region west of the Mississippi. After a month, the numbers fall but are still significant – impacting nearly 2% (national) and 25% (regional). Due to the already tight nature of the truck environment, this means that loads could be left on the docks. The largest effects will be regionalized, but transportation managers across the entire U.S. will be scrambling.

Trucking Impacts
There are four broad effects of these disruptions:

  1. The most obvious disruption is idle trucks waiting for water to recede from roads and loading docks.
  2. The second effect is the extra shipments of relief and construction supplies.
  3. The third effect is extra shipments and lower productivity due to out of cycle supply chain demands.
  4. Finally, there is simply slow operations due to congestion, circuity and backed up loading docks.

FTR has studied several major weather events, starting with Hurricane Katrina in New Orleans. These weather events show significant pricing effects, highlighted by seven extra percentage points of annualized pricing for the five months following Katrina in 2005 and a peak of 22% year-over-year spot price increases following the monster winter of 2014.

“Look for spot prices to jump over the next several weeks with very strong effects in Texas and the South Central region,” said Noël Perry, partner at FTR. “Spot pricing was already up strong, in double-digit territory. Market participants could easily add five percentage points to those numbers.”

Source of article click here : Truck News

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