Although it’s too early to collect data regarding the economic impact from Hurricane Irma, which hit Florida this week, using the fallout from Hurricane Harvey’s impact on Texas, Noël Perry, a partner at research firm FTR Transportation Intelligence and senior economist for Truckstop.com, sees significant impact on truck freight volumes ahead.
Together Florida and Texas represent about 15% of the U.S. economy, he said. As a result, the storm interruptions of those two economic engines, fourth and second respectively among the states, will reduce U.S. gross domestic product (GDP) growth about 0.5% in the third quarter this year.
Those two states also account for about 7% of U.S. trucking activity on a typical day and affect another 4% as important parts of truck trip circuits, Perry added.
Thus, using Harvey as a guide, this week will be a major “down week” for trucking in the Southeast, Perry said, with volumes off perhaps 25%. Inbound to Florida hauls will probably demand a premium, with prices up 10% to 30% depending on the lane. Meanwhile, prices may fall for outbound loads, he noted.
Perry stressed that volumes should get back to normal during the second week, at least inbound, then run “modestly” higher for six months or more.
“Houston is a major manufacturing town, with the chemical plants right down on the water [while] in Florida, it’s mainly consumer activity,” Perry noted.
“So, the effects in Texas will be heavily tank truck and railcar related, while in Florida, it will be dry vans full of consumer goods and flatbeds full of wall board,” he pointed out.
Perry added that national truck capacity tightness jumped up sharply one week after Harvey and jumped some more the second week and thus he expects still another couple of weeks of tightening from that particular hurricane.
“Throw in the Harvey-inspired fuel price hikes and you get 20%-plus jumps in average national spot market pricing,” Perry pointed out. “It doesn’t take long for such regional stress to show up in the national numbers. It is certain that Irma will occasion several more weekly jumps.”
