Losses to Trucking from Sandy Will Be Recouped in Future
Hurricane Sandy hit a region that's both densely populated and important economically. According to IHS Global Insight, the initial estimate of economic losses are in the $30-$50 billion range. However, some trucking companies may see a boost in both the near term and longer term

President Barack Obama and New Jersey Gov. Chris Christie talk with citizens who are recovering from Hurricane Sandy, while surveying storm damage in Brigantine, N.J. (Official White House Photo by Pete Souza)
Hurricane Sandy hit a region that's both densely populated and important economically. According to IHS Global Insight, the initial estimate of economic losses are in the $30-$50 billion range. However, some trucking companies may see a boost in both the near term and longer term.
The loss of economic activity will have a negative impact on the fourth quarter real (i.e., inflation adjusted) GDP reading -- possibly by 0.6 percentage points, according to Bob Costello, chief economist at the American Trucking Associations.
However, he noted in a special economic bulletin for ATA members, there are industries and companies that lose and ones that benefit from natural disasters.
During the rebuilding phase, construction companies and makers of construction materials will benefit, as will the flatbed carriers hauling construction freight related to rebuilding.
He also says fleets are expected to see an increase in activity in the coming weeks and months during the clean-up and rebuilding phases. Dry van carriers will likely see a boost in freight from retailers replenishing store shelves that were depleted in the days before the hurricane, but of course these fleets saw a lull in freight in the Mid-Atlantic and Northeast during the last few days.
According to FTR Senior Consultant Noel Perry, the initial estimated loss of $140 million per day the trucking industry will suffer from downtime associated with Super Storm Sandy will ultimately be recouped because of associated resupply and rebuilding truck freight demands.
Perry's per day estimate of loss revenue is based on 20% of the industry not moving freight because of the storm and its aftermath.
"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 University of Memphis economist agrees that cataclysmic weather in the Northeast could provide a balm for a sluggish economy.
Dr. John Gnuschke, director of the Sparks Bureau of Business and Economic Research at U of M, told the sixth annual Freight Conference on Tuesday that recovery from the tropical storm could well boost the nation's economic numbers.
Gnuschke was filling in for Costello, who canceled an appearance at the Intermodal Freight Transportation Institute meeting because of storm-related flight outages in the Northeast.
Because of "the great storm Sandy," Gnuschke said, "we're going to make people spend more money than they ever dreamed of spending" to repair damage to buildings and infrastructure, purchase emergency relief supplies and other spending.
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