The Effects of Hurricane and Tropical Storms on the Logistics Industry

Labor Day through the New Year traditionally is the busiest season for the logistics and transportation history.  This is due to the extra loads being shipped for the fall season, and the holiday season.

Hurricane season is from June to November with September being the month that sees the most hurricane action.  There have been years where multiple hurricanes have hit impacting the southern region of the United States.

Weather-related impacts combined with driver and chassis shortages can create extreme and unpredictable challenges.

Warehouse and Fulfillment Centers

When a hurricane or tropical storm hits, warehouse and fulfillment centers are forced to temporarily shut down.  While regional centers take on overflow, they reach capacity quickly.  As a result, the bottleneck can affect other areas of the country.  There is a shortage of inventory, longer distances between pick-up and delivery locations, and longer idle and wait times from congestion at locations that are open.

The Aftermath of a Hurricane with Logistics Shipping

Hurricanes bring prolonged delays, high waters and flooded infrastructure will cause cities to essentially shut down.  In bad hurricanes, roads, ports, roadways, rail lines, and airports wash out, making it impossible to move products in and out of affected areas.

Once everything was back and up and running there is a rush of activity to recover from delays.

The transportation industry also plays a vital job in disaster relief after a hurricane, as they often divert trucks from their usual routes.  Further impacting the transportation industry in logistics.  When cities open up a sizable portion of trucking capacity usage is for delivering aid.  This includes the movement of food, medical supplies, and building materials.  It can become hard to book trucks if a large number are moving products to and from nearby affected areas.

Prices Increase Following a Hurricane

The shift in supply and demand for trucks and chassis following a hurricane contributes to the higher cost in freight.  Typically following a hurricane there is a higher cost in fuel that affects truckload shipping.  When Texas sees hurricane and tropical storm activity, it impacts the fuel industry  Texas is home to nearly 30% of U.S. petroleum refineries.

Ocean Freight Industry

It is always better to be safe than sorry, however when a ship is re-routed it comes with considerable financial impact.  An 8,000 containership can consume up to 225 tons of fuel per day.  So even with minimal re-routing, it can be costly.

Intermodal shippers found out after Hurricane Irma that there were unexpected delays for cargo that needed rail transportation.  This delay was for everyone even multinational corporations.

Additional Fees That May Occur

With the delays to land, air, and sea, it is possible that extra fees will be incurred.  Fees such as trucker’s drayage, storage fees, and alternative routes.  They can also add fees as the cargo may need to move through alternative ports.  Ports will have less cargo coming though or finding that they have to store extra cargo.  In the past, many ports have chosen to waive or reduce delay charges due to it being out of customers’ hands.