Natural Disasters Affect the Bottom Line - The Impacts of Hurricanes Harvey, Irma, and Maria

By now, many in the logistics and transportation industry, as well as the clients they are serving, are starting to notice an uptick in the cost of their transportation needs. Much of this has to do with the impacts of the recent hurricane season compounded with the normally busier time of year. Disaster relief is itself an impromptu industry and due to immediacy, creates a glut in the market and thus, transportation activity.

Many companies are seeing opportunity at every turn, from clean up and landscaping companies all the way to the top of retail mega-corporations like Amazon. So what does this mean for your company?  Higher demand for the trucks, planes, and steamships you need to move your goods to market. It also means that transportation costs are subject to the laws of supply and demand. This means higher prices and more difficulty in finding available equipment.

According to JOC.com demand for truckload capacity jumped 15% in August and 80% in September and the cumulative cost per mile rose a total of $.54 per mile in just those two months. Demand is expected to increase from September until after January. With the need for relief and to rebuild infrastructure in the greater Houston area, places all over Florida, and the whole of Puerto Rico, every industry will need to brace for what is to come in the ensuing months.

How the impact translates internationally has more to do with ocean transport rates than it does with air. With steamships from all over the world busier with disaster relief efforts, the normal schedules and rates will be affected, though to what degree remains to be seen.

The best way to counteract these increases and lack of availability is to be proactive in knowing when your goods and products will be ready to bring to market. Lead-times will play a significant role in making sure that your transportation costs will remain as stable as possible over the course of the remaining fiscal year.

 

Contributor: Reed Struxness

 

Citation:

Braden, D. (2017, October 12). US truckload spot market continues to heat up. Retrieved October 16, 2017, from https://www.joc.com/trucking-logistics/truckload-freight/us-truckload-spot-market-continues-heat_20171012.html

---

About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance.  Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe, and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China and Prague, Czech Republic. For more information, visit www.allynintl.com.