This last month of trucking and logistics has been extremely challenging and it doesnt look like relief is coming very soon. In this same time frame we have seen customers reach their breaking point of desperation, looking for any extra capacity that can be found.
But what goes on inside a trucking company during times like this? Are they profitable?
I think you have to consider a few major points when assessing how a carrier handles the storm.
- Did the storm affect any head haul or target markets? When major natural disasters hit, shippers and receivers shut down for days and sometimes weeks. This can throw a trucking company in that area very out of balance or even stop them all-together.
- What are the financial impacts of natural disasters on trucking companies? Lost days, shut down trucks, driver shortages and major delivery delays are just on the short list. Other losses come from increased fuel costs, out of route driving and a higher reliance on broker freight that pays less than normal, customer freight.
- Changes in freight patterns = unhappy customers and poor utilization. Servicing regular customers in markets where you cant put trucks is almost impossible, but it doesnt change the fact that their freight sits and their frustrations mount.
- FEMA business? FEMA can add some additional revue streams to carriers but it will most likely pull their capacity away from year-round customers, which poses even more challenges. Additionally, although FEMA plays good rates, these loads typically come with extended delivery delays and out of route miles. Sometimes the benefits are negated by these factors.
Capacity issues have been on the horizon for all of 2017. These major storms have only exacerbated those problems over the last few weeks. Will it get better soon? We certainly hope so! I think everybody in this country is ready to move past the storm disasters and have their lives back to normal! I know AMX is!