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Harvey Aftermath: Congestion, Rate Spikes, and Regulation Shifts

by Anna Mischke | Sep 08, 2017

052517 customerAs Southeast Texas gradually begins to work towards rebuilding in the wake of Hurricane Harvey, Florida prepares for the onslaught of Irma, a Category 5 hurricane. Florida, along with 26 other states, have suspended hours of service regulations for truckers hauling emergency services, personnel, equipment, and supplies. Trucks transporting FEMA mobile homes into or out of the state are also unrestricted by the regulation.

Registration requirements along with size and weight regulations have been waived for any vehicle “transporting emergency equipment, services, supplies, and agricultural commodities and citrus.” The Emergency Declaration does not stipulate an expiration date for the regulations; the hurricane is already tied for the second strongest winds recorded in the Atlantic Ocean. The busy Port of Houston reopened along with ports in Corpus Christi, Galveston, and Freeport and the roads are seeing returning traffic as commerce works toward a semblance of normalcy. However, the trucking industry experiences difficulty with congestion resulting from a driver shortage and flooded roads; some routes that normally take 45 minutes now take 1.5 hours.

While the intermodal chain faces challenges, companies do what they can to make up for the struggle. The spot market experienced a price spike carrying goods to the Houston region due to Tropical Storm Harvey: the inbound rate for flatbed trucks increase 4% for the period just prior and post storm and increase 24% over the past week. Standard trucks carrying packaged goods increased their inbound rate by 7% just before and during the storm and increase 8% the following week.

These rate increases are due to a number of reasons, the main three outlined by Noël Perry, partner and transportation economist at FTR Transportation Intelligence: truckers enter the region with full trucks and leaving empty, a run-up in diesel prices, and people in need of construction materials due to the storm are likely willing to pay more. While Perry expects that the rates will eventually lower, they may not fall to previous levels.

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