Hurricanes disrupt shipping patterns well beyond Texas and Florida
The two historic hurricanes that recently slammed into the southern United States impacted the economy and supply chains in a multitude of ways, beyond their tragic effect of killing dozens of people and disrupting the lives of tens of millions.
One effect of Harvey and Irma has been that FEMA and other relief agencies have been soaking up much of the already tight capacity of semi-trailers, making it difficult to find equipment to haul loads for private companies, and driving up the prices shippers are paying. FEMA has been paying as much as nine dollars a mile, typically working with carriers with whom they have contingency agreements in place which kick in when storms strike. Systemic trends within the trucking sector currently combine with the always busy lead-in to the holiday season to put truckload and LTL (less than truckload) cargo space at a premium.
Paying top dollar, with the force of the Federal government behind them, it is a given that FEMA will have first call on available equipment. This can cause serious headaches for private shippers with time-sensitive loads to move, and is a good reason for companies to have savvy, connected transportation industry veterans on their team.
As an example, one of our clients, a commercial printer, had millions of time-sensitive fliers for a major retailer printed and ready to ship. They had to arrive on-time at the publications that would distribute them to consumers, or be worse than useless. The contracted carrier begged off moving the loads, pleading national security. Using our connections, we were able to obtain alternative carriers, and while the price we paid was a little higher, we absorbed the difference to help out a loyal client.
A good 3PL (third party logistics provider) can save you money when things are going smoothly, and sometimes save your butt when they don’t.