Hurricane Harvey battered the Texas coastline, and now it may batter parts of the trucking industry. Even as the industry steps up to help, dedicating thousands of trucks and millions of cubic feet of capacity to relief efforts, an analysis from FTR says that approximately 7% of the industry has been affected already and some of that will be affected for weeks.
“During the first week, almost 10% of all U.S. trucking will be affected,” the analysis says. “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.”
FTR cites four areas most affected:
- The most obvious disruption is idle trucks waiting for water to recede from roads and loading docks.
- The second effect is the extra shipments of relief and construction supplies.
- The third effect is extra shipments and lower productivity due to out of cycle supply chain demands.
- Finally, there is simply slow operations due to congestion, circuity and backed up loading docks.
FTR said that major weather events it has studied, going back to Hurricane Katrina in New Orleans, have found significant impacts. For instance, there were “7 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,” according to 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.”
Oil prices are also likely to affected, with Texas providing 30% of U.S. refinery capacity.
“With companies such as Exxon Mobil and Phillips 66 closing down their refineries, we are talking about impacts to fuel and energy,” said Larry Gross, partner at FTR. “In addition, Houston is a big interchange point for rail and intermodal, so it’s not just trucking which will be disrupted. Freight cars are sitting idle outside of Houston. Will they wait out the storm or be re-routed? Of course, those final miles from the railyards are still dependent on trucks. Freight transportation is an integrated system, and this becomes more obvious during major weather events when disruptions occur.”
But as so often happens when disaster strikes, the trucking industry responds. Whether it is with support and fundraising, or with capacity to move relief supplies, the industry is always ready and willing to help. That is the case right now as thousands of trucks are already hard at work moving relief supplies into the areas ravaged by Hurricane Harvey.
Lowe’s has pledged $500,000 to the American Red Cross, but has also started a massive effort to move supplies into the area.
“Right now we have to play it by ear just to see what the conditions are going to be in those areas,” Sarah Lively, a spokeswoman for Lowe’s, told Reuters. “We are reopening those stores as quickly as possible.”
She added that the company has already sent “500 truckloads” of supplies to the area.
Home Deport has committed $1 million to support relief efforts in the region, with funds distributed to several partners, and it too has begun the process of trying to reopen stores in areas affected so that residents have access to supplies for repairs.
Walmart is another company that is stepping up. The company has already moved over 1,000 truckloads of relief supplies into the region, including 927 loads of water, Regan Dickens, director of national media relations, told FreightWaves, as part of a $1 million cash and in-kind relief support.
“The city of Houston is pretty much on lockdown,” he adds. “We’re working closely with government officials to get relief supplies in and stores reopened. We’re coordinating with our logistics and transportation teams and updating hourly.”
In addition to moving relief supplies in, reopening stores is also a priority in the region so residents have access to food and other goods. To do both, though, requires a massive transportation investment, something that Walmart is carefully balancing to ensure stores in non-affected areas also remain sufficiently stocked.
“We’re pulling resources from far and wide,” Dickens notes. “We have distribution centers around the country that are contributing to ensure the stores are stocked.”
Texas’ largest grocery chain, H-E-B, has its own disaster relief convoy (Read more about that fleet here) The fleet, which includes fifteen vehicles, including two mobile kitchens, water and fuel tankers, portable generators, emergency grocery supplies and equipment, was already on the move on Sunday, carrying a mobile H‑E‑B Pharmacy and mobile Business Services unit, which allows displaced residents to fill prescriptions, cash checks and pay bills, as well as provide access to an ATM. The H‑E‑B Mobile Kitchens, two 45‑foot‑long food preparation facilities that are each designed to serve up to 2,500 meals per hour, will set up and serve hot meals to first responders and storm victims.
In addition, H-E-B dispatched a team of 100 employees to help assist in helping folks that have been impacted by the storm. HEB will be providing dry-ice, bottled water, dry-goods, and medicine.
There are dozens of more stories about truckers and trucking companies around the country helping out.
