Hurricane Harvey Affects National Shipping Outlook
The flooding and damage caused by Hurricane Harvey in Houston will impact the shipping industry nationwide. Here’s what to expect in the coming weeks as Houston recovers and rebuilds.
How Hurricane Harvey Impacts Logistics
With total damage estimates expected to exceed $160 Billion USD, Hurricane Harvey is now being touted as the most expensive natural disaster in our nation’s history. As we consider the national fall out from this natural disaster, it’s clear that the damage from the hurricane and ongoing flooding are affecting and will continue to affect logistics for the coming weeks and perhaps months. In the short term, national logistics routes are changing as all truck traffic in the Houston area has been suspended. A significant amount of rail traffic has also been disrupted, as well as 60% of the total container traffic that moves through the Gulf of Mexico.
Houston is the nation’s fourth most populous city and is among the top six freight transportation hubs in the USA. The energy industry has put Houston on the spot market map as the leader in flatbed shipping, due to the large number of drilling rigs and pipes brought into the area on flatbeds. The dry van market is thriving in Houston, carrying South American citrus imports through the Port of Houston to the rest of the USA. Large quantities of fresh fruits and vegetables from the Rio Grande Valley also travel through Houston to millions of American tables across our nation.
This storm has caused immeasurable damage to the Houston area. The devastation and flooding from Hurricane Harvey will impact freight shipments across the entire nation for weeks and perhaps months to come. Freight railroads and intermodal hubs will be affected. Shipping ports will need to re-route cargo to ports on the Eastern and Western seaboards.
From the trucking industry perspective, it now appears that approximately 7% of US truck shipping and logistics traffic will be impacted by the fallout in Houston. Many available trucks in the Houston area are currently being utilized by FEMA, or are simply out of commission from damage or flooding. Shipping prices are expected to continue to rise until Houston is able to regain its role as a central shipping hub.
“Quite simply, freight that would have normally passed through Houston must now be shipped through other ports,” says Scott Hecht with Nationwide Transportation. “Indeed, the entire world will feel the impact of Hurricane Harvey’s ability to impact shipping to and from and within the USA. The impact will be felt across the nation and around the globe to a lesser degree, as the industry adapts and changes shipping patterns. Clients can expect longer hauls and higher costs to ship freight across the US.”
When the storm clouds dissipate and Houston begins to dry out, we can expect that inbound rates will see a significant boost as the construction industry swings into action and sets the pace to rebuild, repair and reimagine Houston after Harvey. Heavy equipment, building materials and goods from around the globe will make their way into the Houston market, marking the beginning a very long restoration and rebuilding effort.
Here at Nationwide Transportation, our hearts and prayers go out to the people of Houston. We hope you’ll join us in supporting charities that will manage the daily needs of those who are now homeless or without employment. We recommend visiting GiveWell, Charity Navigator, Charity Watch, and the Better Business Bureau, to help make informed decisions about where to donate to help the people of Houston.