Truckload rates spiked following hurricanes Harvey and Irma
and will remain significantly higher in the months and maybe even years
ahead.
Approximately 6% of the U.S. truck fleet has shifted from
normal commercial activity to disaster relief and reconstruction. This will increase domestic transportation
costs for shippers through the end of the year, according to the
Journal of Commerce.
“Storms like these suck capacity out of the rest of the
nation,” said Charles Clowdis, the Managing Principal for Transportation at IHS
Markit Economic and Country Risk.
Truckload rates in some lanes could rise 20%, Clowdis said, as capacity
and pricing adjust to the post-hurricane economy.
The impact so far has been primarily on spot market rates.
However, contracted rates have started to follow. The head of one national truckload
carrier said contracted rate increases of 3% are “a lay-up,” and industry
analysts say the increases could eventually come in closer to 8% if spot rates
remain elevated past the end of the year.
This seems likely given the extent of the damage. Truckload
rates saw a “storm effect” for 12-15 months following other large hurricanes
such as Katrina.
Additionally, the trucking industry is dealing with other
factors that have an inflationary impact on rates, including a tight labor
market and an onslaught of new regulations such as the one for Electronic
Logging Devices.
Rates in other modes, particularly LTL and rail, have also moved higher as demand surges for these services, too, and as frustrated truckload shippers look to alternatives for price relief.