According to a report released Monday, FTR has determined Hurricane Harvey’s broad swath across Texas this weekend will strongly affect over 7 percent of U.S. trucking, with some portion of that fraction out of operation for two weeks.
FTR says during this first week, almost 10 percent of all U.S. trucking will be affected. That number jumps near 100 percent for the Gulf Coast region west of the Mississippi. After a month, the numbers fall but are still significant – impacting nearly 2 percent (national) and 25 percent (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, FTR says.
The company believes there will be four broad effects of these disruptions:
- Idle trucks waiting for water to recede from roads and loading docks.
- Extra shipments of relief and construction supplies.
- Extra shipments and lower productivity due to out of cycle supply chain demands.
- Slow operations due to congestion, circuity and backed up loading docks.
“Look for spot prices to jump over the next several weeks with very strong effects in Texas and the South Central region,” says Noël Perry, partner at FTR. “Spot pricing was already up strong, in double-digit territory. Market participants could easily add 5 percentage points to those numbers.”
FTR has studied several major weather events, starting with Hurricane Katrina in New Orleans. These weather events show significant pricing effects, highlighted by 7 extra percentage points of annualized pricing for the five months following Katrina in 2005 and a peak of 22 percent year-over-year spot price increases following the monster winter of 2014, FTR reports.
