JOC | Shippers, Transport Providers Steel for Long Harvey Recovery

08.29.17 | Joseph Bonney, William B. Cassidy, JOC

Freight transportation in and around Houston remains at a standstill as companies check on staff, assess damages, and prepare for a difficult recovery and higher truck rates after historic flooding unleashed by Hurricane Harvey.

Port terminals, major highways, rail lines, airports, industries, trucking docks, and warehouses remain closed, along with most regular business activity in the fourth-largest US city. Cargo remains stuck in warehouses, at port terminals, and on inbound ships.

Port Houston is taking a day-by-day approach to reopening its terminals, which closed at mid-day Friday before Harvey hit land near Corpus Christi. The US Coast Guard has halted ship traffic at Houston, Galveston, Freeport, and Corpus Christi until port channels and navigation aids can be checked.

As rescues continue in flooded neighborhoods across the Houston metropolitan area, the logistics industry is looking ahead to a likely spike in trucking rates after high water recedes from streets and neighborhoods.

“Look for spot prices to jump over the next several weeks, with very strong effects in Texas and the South Central region,” said Noel Perry, partner at freight analyst firm FTR. “Spot pricing was already up strong, in double-digit territory. Market participants could easily add 5 percentage points to those numbers.”

FTR said Hurricane Katrina, which devastated New Orleans and the Mississippi coast in 2005, caused annualized trucking rates to rise at an average rate of 7 percent. The mid-winter storms of 2014 produced a 22 percent year-over-year jump in spot rates, the analyst said.

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