How Does Weather Impact Supply Chains?

Jan 07, 2020 at 08:36 AM CST
Major weather events such as hurricanes, blizzards, and historic flooding can produce immediate volatility as well as lasting effects on supply chains, depending on where they hit. Besides the obvious results of every day/short-term weather – possible shutdowns of local/ regional supply chains and potential closures of roads, businesses and government offices – intense and long-term weather events have a bigger effect on supply, demand and freight rates. There's often a rush for truckers to get freight out of areas that are about to get hit by a significant storm. This can drive down spot rates that carriers charge because they need their drivers to get out of these areas quickly with freight. Rebuilding after a destructive hurricane leads to a surge of inbound shipments of lumber and other materials into the affected markets, often resulting in spot rate increases due to higher demand.

Jan 07, 2020 at 08:36 AM CST

Major weather events such as hurricanes, blizzards, and historic flooding can produce immediate volatility as well as lasting effects on supply chains, depending on where they hit. Besides the obvious results of every day/short-term weather – possible shutdowns of local/ regional supply chains and potential closures of roads, businesses and government offices – intense and long-term weather events have a bigger effect on supply, demand and freight rates. There's often a rush for truckers to get freight out of areas that are about to get hit by a significant storm. This can drive down spot rates that carriers charge because they need their drivers to get out of these areas quickly with freight. Rebuilding after a destructive hurricane leads to a surge of inbound shipments of lumber and other materials into the affected markets, often resulting in spot rate increases due to higher demand.