FTR estimates truckers will recoup losses from Sandy
Despite losing an estimated $140 million per day* from down time associated with Hurricane Sandy, trucking companies will ultimately recoup their losses, according to Noel Perry, Senior Consultant at the Freight Transportation Research Association (FTR).
Research by Perry indicates that these short-term losses will be recouped through the resupply and rebuilding necessitated by Sandy, which will lead to a larger demand in the trucking industry.
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“While some fleets will surely lose revenue during the initial phases of the latest disaster, storms like Sandy create new demand later,“ explained Perry.
“Retail outlets need immediate resupply that only trucking’s time sensitive character can accommodate. Plus storm damage needs to be fixed. That creates longer term additional freight tonnage. While the storm is devastating to many, the trucking industry will see mostly positive effects.”
A prediction by IHS Global Insight released an initial gloomy estimate of total US losses of between $30 billion and $50 billion or up to 0.6 percent off the annualized fourth quarter read GDP growth, as a result of the ‘virtual shutdown of business activity along key parts of the East Coast.’
Despite the destructive effect to other businesses, it seems other industry experts are quietly confident about the trucking industry.
Bob Costello, Chairman of the American Trucking Association (ATA) released a special economic bulletin for ATA members last week, reportedly nothing that ‘there are industries and companies that lose and ones that benefit from natural disasters’.
Costello continued to highlight an expected increase in activity in the coming weeks and months during the clean up and rebuilding phases. Dry carriers are also expected to experience an increase as they restock retailers.
*based on an estimate of 20% of the industry not moving due to the storm and its aftermath.