Before we get into our discussion on how major hurricanes affect freight rates, Hurricanes Florence is currently making landfall along the coast of the Carolinas. Forecasters expect Hurricanes Florence which is now listed as a category 2 to directly impact Wilmington, North Carolina with the outer bands coming as far as three hundred miles inland.
Below are some bits of advice pertaining to preparing for any natural disaster. As always, if you’re looking to acquire transportation for your freight during this hurricane season please reach out to firstname.lastname@example.org
As we previously mentioned in this post, freight rates are very violate pricing that cannot be predicated when major catastrophe events take place. During the peak of hurricanes season, we’re seeing more storms forming into hurricanes leading to unpredictable freight rates.
The question becomes why do major catastrophe events such as hurricanes drastically affect rates?
If you’re familiar with the supply and demand model you’ll know that in some cases the demand for a product outweighs the supply for it. When major hurricanes are bearing down a region one of the first things everyone does is fill up on gas.
The demand for gas become so much gas stations usually runs out of gas. Oil becomes more of a premium leading to a shift in pricing to the customers. With gas in high demand in the Carolina areas, freight rates to and from that area are expected to take a major hike!
As with any manufacturing or shipping facilities, the operation is only as good as the employees. In the cases of hurricanes, employees have to stop work to prepare their family and property for possible impact.
This leads to freight becoming a standstill which in turns affect the rates. Truckers are least likely to visit an area if they know there are no possible backhauls out of the region.
When major Mother Nature events such as hurricanes, tornadoes, and earthquakes take place you can only expect to see major damages. Tree, light poles, and debris will greatly affect the maneuverability of trucks through the area.
If it’s possible to get through the area truckers are looking for premium freight rates since there are more likely fewer drivers working in the ransack region.
All of these factors and many more play a huge role in freight rates. Just last year, the hurricanes that hit the gulf coast region caused rates to hike up 20% from the previous year.
When major events like this take place my best advice would be work with freight brokers that can utilize contacts to find reasonable and reliable carriers to transport your freight.
For all our readers and customers affected by Hurricane Florence please be safe and until next time, Happy Shipping!