Hurricane Ian expected to make landfall on the West Coast of Florida Thursday morning as a category 3 with powerful winds gusts capable of reaching upwards of 120 MPH.
Peak storm surges capable of reaching 5-10ft in the Fort Myers and Tampa Bay areas could lead to significant flooding. Surges coupled with the possibility of rain accumulation above a foot will leave parts of the Florida coast in rough shape in the coming days.
By late Tuesday/early Wednesday little to no freight will be able to move in or out of the soon-to-be affected areas.
It seems that Ian will have moved through the state and have been downgraded to a tropical storm by Saturday morning. Depending upon the damage and the accessibility to roadways I would expect FEMA to have started dispatching emergency relief items to the affected areas by early next week.
As conditions improve, freight flows will obviously begin to pick back up however carrier displacement as with any natural disaster is expected to linger.
Lakeland, Florida and Miami will be two of the most-affected domestic markets. The two alone hold about 2.7% of the outbound van market share in the US.
Ian’s disruption to those markets will push a significant portion of the for-hire truckload supply North.
As these carriers jump into surrounding markets, I would anticipate a slight easing in capacity in markets such as Tifton, Savannah, Macon, and other surrounding areas as fleets that wouldn’t typically operate in these markets jump into the spot market.
The annual peak season where retailers push to get consumer items ready for the holiday season is right around the corner. However, several signs continue to point towards more of a pit than a peak season this year as: hiring slows, inflationary pressures remain, real hourly earnings over the past year continue to decline near 3%, credit card usage continues to increase and delinquency rates begin to rise.
The good news?
Inventories remain elevated which should incentivize retailers to push a plethora of items out to consumers at hefty discounts in order to cut costly warehousing expenditures and make room for the appropriate seasonal items.
This has been your Bridge Logistics Market Update for the week of September 26th, 2022.