Riding the storm out
The recent flurry of foul weather doesn’t just wreak havoc people who live and own businesses in hurricane-ravaged regions. Destructive hurricanes like Harvey and Irma also can have lasting aftereffects on the transportation sector.
“The chaos begins even before the storm hits,” says Michael Preisinger, managing director of Agforce Transport Services.
“Leading up to the storm, prices for transportation begin to rise as truck drivers know they are going to have a hard time getting out of these regions with freight,” Preisinger says. “They are also looking out for their own safety.”
After the storm, there typically is an uptick in demand from shippers trying to get goods to the affected areas. This creates a surplus of trucks in the regions affected by the storms, which results in skyrocketing prices for trucks heading those directions. “They know there will be very limited amounts of cargo leaving the areas they are delivering into,” Preisinger says.
But it’s not just the regions in the eye of the storm that are affected: As prices rise to move cargo to the storm-affected areas, truckers will leave their regular routes to find the highest paying cargo heading to these areas. This tends to drive up prices around the country, as demand for trucks will outstrip supply.
Another problem that affects the market is when ports have to close due to storms. This causes ships to move cargo to alternate ports, which drives up demand for trucks in those new port regions that the ships go to. “That generally happens during hurricanes, which can cause a lot of damage and prolong the market disruption as the region rebuilds,” Preisinger says. “It can happen during big winter storms too, but in those cases the market typically rebounds in a few weeks.”
How to Be Ready:
- Be patient and flexible. Demand for trucks will go up, which means you may not be able to ship your product on the exact day you want. Ideally, having a shipping window of several days will increase your chances of getting the load moved.
- Be prepared for temporary price increases. Basic supply and demand principles apply here. As demand goes up, so do prices.
- Consider moving your cargo a different way. For example, move your over-the-road cargo to the rail, or vice versa (this is known as modal conversion).
Agforce Transport Services is storm-ready. We work with our customers to provide customized solutions for moving their cargo when the market has been disrupted.
Agforce would like to tip our hats to all our colleagues across the transportation industry who assisted in the hurricane relief nationwide. Convoy after convoy of utility trucks, fuel tankers, tree-cutting crews and box trucks made their ways south to help.
To learn more about storm-ready solutions and how we can help simplify your path to market, contact us today for a free consultation. Give us a call at 844-713-6723 or email us at firstname.lastname@example.org.
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