Over the past few days, I have received a large number of inbound requests asking me for thoughts on Irma and what fleets can expect. First off, I leave the weather forecasts to the experts at Riskpulse, that have a team of meteorologists that can provide insights on how any weather pattern will impact the supply chain.
My insights in this article are specific to relief logistics, having been involved in U.S. Xpress’ disaster recovery logistics efforts during the mid-2000’s when we experienced eight major storms ranging from Isabel, the Florida four to Katrina.
As of Tuesday afternoon, not much is happening in the government logistics (with the exception of Puerto Rico) related to Hurricane Irma. The storm is too far out and no one knows exactly where the storm will make landfall on the Continental U.S. According to Riskpulse models, current tracks suggest the storm could hit South Florida around Naples. The economic impact of such a hit would be huge, but the East Coast of Florida is much more densely populated, so the impact would be much greater on that side of the state. Early predictions, though, are just that. Storms change course, and Riskpulse is noting that Irma is still expected to make a turn more to the north, which could change its expected landfall area. When the change occurs will be the deciding factor.
The good news for Florida is that it is prepared for a major hurricane. The state has been through this drill on numerous occasions and is not blind to the impact. Florida has a whole network of warehouses that store things such as water, MREs, canned goods, generators, flash lights, batteries, etc. It also has experienced logisticians that are trained to deal with these types of storms. Florida is world-class in this area. The initial supplies will come from these warehouse networks, but they will want to replenish quickly to ensure enough is available for residents.
Expect the state to respond and likely start ordering trucks about 48 hours before the storm is expected to make landfall. The trucks will not bring supplies into the state until after the storm passes, but the state border is usually a great staging area.
Expect the first line of supplies to come from the Southeast. I would expect high demand of supplies coming from the Carolinas, Georgia, Alabama, and Tennessee, and to be ordered soon with water and other relief supplies to be in demand.
I am hearing reports that some of the big-box retailers and supermarkets are starting to position freight into the area to respond to demand. This is normal. We always saw a run up about five days in advance of a major storm system. Companies like Home Depot and Lowes are world-class in this regard. They typically invite their large core carriers into “war-rooms” to coordinate with their internal operations. Demand for gas cans, generators, plywood, and duct tape increases during these cycles. The good news is that because of Harvey, the stores are already staffed and coordinating logistics from the ground to HQ.
When the storm hits, it will be chaotic. The only time we have seen any level of back-to-back major hurricane activity was during the Florida four in 2004. There were four named storms that hit Florida the same season. These storms are much bigger, however.
You can expect freight rates to accelerate in the spot market. Talking to some brokers and carriers, the going rate for disaster relief is around $900 per day. If Irma is as massive as it appears it could be, then the daily rates will go up from there.
Continue to stay tuned to FreightWaves for updates from Riskpulse, Breakthrough Fuel, DAT, and other market sources.
