Spot markets likely to tighten after Dorian clears US shores

Dive Brief:

Throughout Friday morning, Hurricane Dorian moved through North Carolina and is expected to pick up speed through Saturday, according to the National Hurricane Center. Storm surge warnings are still in effect for parts of North Carolina and Virginia and wind speeds in North Carolina should reduce through Friday afternoon. The storm will lose strength and transition into a past-tropical cyclone — still with hurricane-force winds — as it crawls toward Nova Scotia Saturday night.
U.S. ports south of North Carolina resumed normal operating hours as of Friday. The Ports of Wilmington and Morehead City remained closed Friday and will reopen container terminals Saturday and resume full operations Monday. North Carolina Ports reported no significant damage at either port after an initial assessment. The Port of Virginia closed Friday and plans to resume normal operations Saturday "barring any extraordinary service restoration needs." Railroads are returning to normal service too. Norfolk Southern reopened all origins as of Friday. CSX told customers the railroad continues to monitor the storm and will alert them to any delays.
Demand for trucking is likely to increase as the storm clears the U.S. East Coast and shippers rush to get freight back on course, GlobalTranz Director of Customer Operations John Ferguson told Supply Chain Dive.

Dive Insight:

Freight markets felt some uptick in demand from Hurricane prep. DAT noted in a report that outbound reefer volume was up 14% and the average outbound rate jumped 8 cents to $1.39 per mile in Lakeland, Florida, just before the storm, plus Lakeland to Atlanta jumped 18 cents to an average of $1.38 per mile.

Ferguson said GlobalTranz worked with customers ahead of the storm to prioritize freight and find alternative routes and destinations that could place freight closer to the ultimate destination but out of harm's way.

But it's the immediate aftermath where demand is more likely to spike, likely in a wave up the East Coast following the storm, explained Ferguson.

"On a Friday, it’s always a good indicator of what you might see. In the market today, I am seeing an influx of freight out there and that's as the storm is passing through Florida, through Georgia, through these coastal areas. I am seeing a lot of freight coming into these markets, but most of it is after the storm is passed," said Ferguson.

He added that many shippers will avoid the spot market if they can to save on costs, but also to keep from inflating the market, especially since it has been tempered in recent months and shippers want to keep it that way.

Ferguson's clients today are speaking with customers to better understand what loads they absolutely need and what can wait.

"A couple of our key beverage accounts, they’re having meetings this morning asking if they’re willing to spend more or take a wait and see approach ... Speaking with clients, I’ve seen that they are taking a wait-and-see approach," he said.