Hurricanes surprise very few people. In most cases, landfall (timeframe and location) and severity are known hours – if not days – in advance, but they consistently create logistical logjams for inbound and outbound freight.
“Because freight flows in a pretty consistent and general direction, when you have these natural disasters it disrupts the freight flows that are in place. What happens is you’re going to have a lot of inbound freight to those natural disaster areas – or those FEMA embargoed areas or those FEMA hotspot areas – and those inbound materials that are going in there, they’re going to be the commodities needed to service the disaster – the water, the ice, the food, the lumber,” said Mark Derks, chief marketing officer for 3PL BlueGrace Logistics, “but what people also don’t understand is the freight that was flowing out of those areas still needs to flow out. The freight out of those natural disaster areas is also part of the demand.”
Hurricane Ida affected freight in and out of New Orleans a week before making landfall Aug. 29. Inbound van volume increased 5% during August 22-28, according to DAT, while outbound volume jumped 19% compared to the previous week. Temperature-controlled shippers were also busy moving freight away from the storm, with outbound volume up 25% week-over-week.
New Orleans is typically not a large flatbed market, but during hurricane season inbound loads of building materials, machinery and lumber surge in anticipation of high demand during rebuilding. Three weeks ago, inbound flatbed volumes jumped by 47% week-over-week before dropping to more typical levels, according to DAT.
Data from Truckstop.com and FTR Transportation Intelligence for the week ending Sept. 3 shows that both the dry van and refrigerated segments posted their highest weekly total (including fuel) spot rates ever, riding what the firms called the “Weather and Holiday Effect.” Refrigerated volume also was at an all-time high, surpassing the prior week’s record.
Lasting impact on carriers
The intersection of an affected location’s inbound and outbound freight, Derks said, “constricts the capacity available for the supply chain. With that restriction or contraction of the available capacity, it starts to impact service levels, it starts to impact capacity availability in general, it starts to impact pricing, and it puts a lot of other dynamics and elements into the movement of freight in and out of those areas for both carriers and for shippers.”
Impacts on freight flow, Derks said, typically are felt more than a month following a natural disaster.
“Generally what happens is when you have a natural disaster like Hurricane Ida, you’re looking at a minimum of two weeks but probably more like a month – probably a good solid 30 days of disruption of this capacity and then it might take two weeks to another 30 days to reposition all of that equipment back into where its normal freight flow goes,” he said.
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