While still recovering from Beryl, it’s time that we brace for impact and the shifts in the logistics industry that hurricane season promises to deliver.
We’ve posted about how to prepare and safely navigate hurricane season before because unfortunately, it comes back every year. This year, we’re focusing on how the season might finally shift us from a shippers market to a carriers market.
Shippers had the Lead
Remember those insane shipping delays in the time following the outbreak of COVID? Online shopping meant huge amounts of products were being ordered but there weren’t enough trucks to carry it all. Carriers were able to set their ideal rates and shippers had no choice but to go along with it. However, in the past two years, the market not only balanced out, but swung in the other direction. As the available capacity started to outweigh the volume being shipped, the market has suffered from ‘shippers revenge.’ Carriers have had to take a step back as the advantage shifted to shippers and rates have dropped to historic lows.
Flipping the Market
The cycle of the freight industry is exactly that, a cycle. The market constantly shifts between favoring carriers or favoring shippers, rarely experiencing brief periods of stability anywhere on the swing of the pendulum. But what’s one thing guaranteed to flick the needle? The shut down of a major city.
Condition Zulu
Hurricane Beryl struck the coast of Texas with winds blowing up to 94 mph, 8 inches of rain, and 7 feet of storm surge. These conditions led the Coast Guard to set the port conditions at Houston, Corpus Christi, Galveston, Freeport, and Texas City to Zulu, meaning no vessels may enter or move within the port without the permission of the Captain of the Port. With no activity at these major ports, goods to be shipped are piling up.
Carriers Revenge
Once ports reopen there will be a mad-dash to get product moving again. Trucks will race down for loads with carriers demanding premium rates. As hurricanes continue to affect coastal regions, trucks will move in those directions like a moth to a flame. Whether they are helping with recovery efforts or just trucks in the area getting trapped by road conditions, the rest of the country will notice the shift. A lack of trucks in other areas will mean carriers once again will have the upper hand when setting rates.
Stay in control
As hurricanes continue to impact our ports and roads, it’s important to stay on top of your shipping and supply chain needs. Lync brokers are always ready to help you navigate the changing market and make sure your logistical needs are met.