Despite current fires in Southern California surpassing the size of October’s Sonoma County blaze, the impact on the freight market has been limited, according to a report by FTR.
The location of these fires outside of major metropolitan areas has been the most important factor in depressing the effect on freight movements in the region. Freight volumes appear to have stayed at normal levels for this time of year and spot van rates both into and out of the region haven’t shown a strong reaction.
“The fact that we are in the midst of the holiday and end-of-year freight season causes us to view any results with a skeptical eye,” said Jonathan Starks, chief operating officer of FTR. “We are early in this analysis; however, volumes so far are holding up much better than during the Sonoma event.”
In its analysis, FTR compared the current rash of wildfires to other natural disasters that have occurred in the past year, including Hurricanes Irma and Harvey. This allowed them to gauge how trucking is affected during a natural disaster and in its aftermath. FTR also took into account the time of year and the increased movement of goods during the holiday season.
The wildfires that scored Northern California in October caused inbound rates to rise and outbound rates to decrease. Outbound volumes for van freight in California took a significant hit then, but returned to normal within three weeks. FTR said the reasons for the fluctuation are simple: Truckers are reluctant to go inbound to risky environments and rates for inbound freight increases to incentivize them.
But in the case of the recent spate of fires in Southern California, the remote location of the largest fires – in Ventura and Santa Barbara Counties to the north and San Diego County to the south – left the Los Angeles Metro market and the Ports of Los Angeles and Long Beach untouched.
California outbound van volumes are at a normal level for early December, according to FTR. Part of the answer may lie in the fact that produce moves are going very strong right now and they are generally outside of the immediate L.A. region.
While the fires have threatened some major interstate highways at times, truckers have managed to route around them, needing only extra miles to stay away from the affected areas.