Commentary: Hurricane Harvey Update – The Recovery (Public)

09.11.17 | Noël Perry

It’s apparent that people are working very hard in Houston because the spot market trucking statistics are showing strong positive moves, in some cases to levels above pre-storm benchmarks. Let’s look at the story in two stages, the first being the storm week itself.

During that terrible week, outbound volume fell by 20%, inbound by 10%. Clearly, there were many brave truckers bringing in critical supplies; otherwise the inbound numbers would have been much worse. Outbound prices fell by 9%, but the market rewarded the hardy inbound truckers, with prices up 7%. Such tough conditions continued until day twelve of the event, six days after the heavy rains stopped. This span was probably stretched by the long Labor Day Weekend, but clearly supply chains needed time to recover before the loading docks were put back to full use. Interestingly, Houston is an inbound backhaul market (at least during normal times) and has remained so since the storm hit. Yet, inbound prices are higher than outbound, the reverse of normal pricing for backhauls.  That’s a reversal of norm trucking practice since backhauls are normally lower than headhaul prices.

Stage 2, beginning with day thirteen, Tuesday, September, 5th, the recovery has started. Outbound volumes are up 29% for the week (through Friday) and would be back at pre-storm levels if not for Labor Day. Outbound prices still lag pre-storm levels. The volume situation outbound is very good news because it implies that the Houston manufacturing sector, so important for U.S. fuel and chemical supplies, is roaring back to life. On the inbound side we see clear evidence of the beginning of the rebuild efforts. Volumes are up 10% over pre-storm levels. Prices have stabilized as well, almost exactly at pre-storm levels.

As to differences by trailer type, the inbound reefer sector is the strongest - retailers are busy restocking shelves. Flats are weakest " apparently, construction is still depressed. This is due to the fact that it is the hardest to restart - given the need to acquire capital, secure permits and draw up plans. With each additional tranche of’s remarkable data we learn more about the nuances of these traumatic events. Sadly, 2017 looks to be a year of extra learning as the second catastrophic storm moves towards and through Florida.

Stay Safe!