The initial impact of Florence on the freight market has been mostly regional as the flood waters have yet to even crest in some areas. Damages will be assessed over the next few weeks, but early estimates are stating a $20 billion impact to the areas hit. By comparison, Harvey, that hit the Houston area last year, cost roughly $125 billion. In other words, the impact to the national freight market will not be fully realized for a few weeks, and it will be less than that experienced last year pending any other events.
Trucking volume in the largest North Carolina market was erratic during the past week. Charlotte has averaged approximately 1.72% of total outbound freight volume in the U.S. since April first, saw outbound tender volumes spike 9.98% over the course of two days after the forecasted path had the storm make landfall in the Wilmington, NC area. The volume has since receded to just below average levels at 1.66% as of Tuesday.
Atlanta appears to have been on the receiving end of the volume as it saw inbound volume increase 9.44% over a 4-day period. Tender rejection rates in the Charlotte to Atlanta lane shot up over the same time reaching its highest levels since mid-July. Many shippers and carriers alike were positioning their goods and trucks outside of the impact areas.
The majority of the impacted area is rural so there will be longer run impact to volume due to lost harvests and livestock. The southeastern corner of North Carolina is the 2nd largest producer of hogs in the U.S., which was one of the hardest hit areas. There is also a large amount of poultry and eggs produced in the eastern part of the state. In early spring this year Rose Acre Farms reported a salmonella outbreak at their North Carolina facility. Outside of the direct loss of commodities, there will be concern from pollution due to runoff. The impact to this area will be felt for many months to come, especially in the specialized carrier niches.
Outside of the Florence impacted zones, the general freight market did not experience any increases in volume and continued to remain relatively flat in general. A slight increase in national tender rejections occurred with the national rate moving up 0.5% over the past seven days to 17.58%.
Markets of interest during the past week appear to be concentrated in the northeast around Philadelphia. The Harrisburg, PA market volume has increased on both inbound and outbound with outbound starting to outpace inbound. When outbound exceeds inbound at an accelerating rate capacity issues tend to follow. Outbound tender rejection rates are currently 2.39% higher than one month ago. FEMA does have a presence in the market, so the impact of Florence could be felt here.