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Hurricane Harvey Will Hammer Trucking

Texas is one week post-Hurricane Harvey and still dealing with the immediate clean-up. Experts say it will take the city years to fully recover and rebuild. But how has Harvey affected trucking? And how has trucking responded to the crisis?

FTR Transportation Intelligence estimates Harvey will strongly affect 7% of US trucking for the first few weeks. After that, the numbers drop to 2% on a national level and 25% on a regional level.

Rates will definitely rise. “It will be somewhere in the 8-10% range, but we’re just a few days into it,” Mark Montague, industry pricing analyst with load board operator DAT Solutions, said. Although all the data isn’t in, experts agree truck pricing and transportation costs will surge.

Capacity has been an issue for some time and will likely get tighter. Recovery from Harvey will monopolize truck capacity that would normally be used elsewhere.

Securing truck capacity will be an immediate problem for shippers as prioritizing shipment of relief and emergency supplies over regular freight takes place. However, the big deal is the supply chain, according to chief economist Noel Perry said. “Supply chains are going to be messed up” not just for days but weeks and perhaps months as shippers and their transportation partners work around inefficiencies created by the disruption of Hurricane Harvey.

“I expect disruption to last for at least two months,” Perry said. “The big effect is not a shortage caused by an event, but the fact that the trucks are moving in goofy ways that lowers their effective mileage per day. The effect is a decrease in supply-chain productivity.” Trucks and trailing equipment far beyond Houston and Texas will be out of position thanks to Harvey.

After Hurricane Katrina and the flooding of New Orleans in 2005, US shippers paid on average up to 7 extra percentage points of annualized spot market truck pricing for five months. However, Harvey brought more rainfall in a much larger city and one that houses a major port of entry. Montague also noted companies that have distribution centers in Houston are unlikely to have other facilities in nearby metropolitan areas such as Dallas. As a result, they need to ship freight from alternative areas to serve customers in and around Texas.

“That is why this has such a national impact,” he said. “It changes the shipping patterns, it increases the length of haul, and has a ripple effect throughout the supply chain.”

Port terminals reopened Friday after being closed for a week and airports have resumed limited flights. However, regular business activity in the fourth-largest US city has still not fully resumed while many businesses make repairs. Cargo remains stuck in warehouses, at port terminals, and on inbound ships.

Federal Motor Carrier Safety Association announced Friday that due to an expected shortage of fuel products, “due to refinery delays and interruption of delivery through pipelines as a result of damage from Tropical Storm Harvey,” it has declared a regional emergency declaration for 26 States and the District of Columbia. “Motor carriers and drivers providing direct assistance to the emergency transporting fuel products into and from these States and jurisdictions are granted emergency relief from certain regulations. The suspended regulations include those concerned with driver hours of service, inspection, repair, and maintenance, hazardous materials transportation, driving, and parking, and other health and safety standards.

Not surprisingly, the trucking community has stepped up to help in this extreme time of need. Numerous trucking-related companies have made large donations to charity, such as Daimler Trucks and UPS’s $1 million donation to Harvey recovery. Love’s Travel Stops donated $1 million to recovery efforts plus an additional $500,000 to the United Way to be distributed by local agencies for long term need. The Illinois Trucking Association is collaborating with the Texas Trucking Association and has contacted its members that have terminals near Houston to offer equipment, supplies, and money to the Harvey recovery effort. ITA has asked any members with trailers or available trucks and drivers to assist in taking supplies to the area. Several companies have held supply drives. One trucking company, Clearline Transportation out of Utah, is offering full-time employment to experienced CDL drivers in the Houston area. Clearline has even offered to help relocate drivers on a temporary or permanent basis while they recover physically and financially.

Hurricane Harvey escalated quickly and left a devastating effect on the Texas coast. It will affect trucking, among other industries, but the resilient people in trucking and in Texas will work together to rebuild and move forward.

Source: Journal of Commerce, Fleet Owner

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