Market Overview

Southern Freight Markets Reacting Little To Impending Snowfall

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Southern Freight Markets Reacting Little To Impending Snowfall

Parts of the South will look like a winter wonderland today, but it may not be a treat for truckers. Snowfall will probably delay freight flows in areas that aren't used to seeing many winter storms. However, as we will explain later, this hasn't really affected the behavior of freight markets in the impact zone.

What's Happening?

A low pressure system on the Gulf Coast is pumping abundant moisture into the Southeast. Rain is falling where temperatures are warm. But cold air is moving into the northern side of the storm, supporting a change from rain to sleet and freezing rain, then to snow.

SONAR Critical Events: Thursday, Feb. 20, 2020; Southern winter storm

The National Weather Service (NWS) has posted various winter weather alerts from northeastern Georgia and eastern Tennessee to upstate South Carolina, much of North Carolina, and southeastern Virginia. Some of the heaviest snow – up to 6 inches – could hit the high elevations of the Smoky Mountains until sundown today, from Gatlinburg into western North Carolina.

Up to 4 inches – with isolated spots of 6 inches – could pile up in places like Asheville, Raleigh-Durham, Rocky Mount, New Bern, and Elizabeth City, North Carolina; as well as Virginia Beach and Norfolk, Virginia. The snowfall will end in these areas late tonight.

Look for slick conditions and freight flow delays on portions of I-40, I-64, I-81, I-85 and I-95 in the impact zone. Temperatures will drop well below freezing by the time the storm moves out to sea, leading to the potential for black ice on many roads.

Impact On Freight

With a winter storm coming, one might think carriers would react by rejecting more loads from markets in the storm's path, keeping drivers from going there to pick up freight. But, based on the latest Weighted Rejection Index (WRI) in FreightWaves SONAR, this doesn't seem to be the case.

The WRI is a product of market share – the percentage of outbound freight volume in a market compared to the other 134 markets in the U.S. – and the weekly change in outbound tender rejection rates, the percentage of loads offered by shippers that carriers are not accepting for various reasons.

SONAR Ticker: WRI

The approximate impact zone of the snowstorm is outlined in green on the WRI map directly above. The freight markets in the zone are showing up red and white. White means that rejections have been fairly steady over the past week; red indicates that rejections have been decreasing over the past week. If carriers were highly concerned about the snowfall, they would likely accept fewer loads and rejections would increase, turning these markets blue on the map.

But there may be an explanation. If shippers have agreed to extend their lead times – the number of days between when a carrier accepts a load to when it has to be picked up – carriers could still accept loads and wait until just after the storm ends to pick them up. This way, their drivers could avoid the bad weather.

But shippers haven't extended their outbound lead times in Charlotte (OTLT.CLT) or Raleigh (OTLT.RDU), the two markets in the storm's path with the lowest WRI values. Their lead times have either decreased or marginally increased in the past few days since the first mention of the potential snowfall. This indicates that shippers may not be too concerned with this storm's impacts, either.

SONAR Ticker: OTLT.CLT, OTLT.RDU

Soggy Situation

Meanwhile, heavy rainfall will drench parts of the Deep South, from eastern Texas to southern North Carolina. This includes areas of Louisiana, Arkansas, Mississippi and Alabama that are still flooded from last week's torrents. River flood warnings issued by the NWS last week remain posted. The rain will gradually fade from west to east this afternoon and evening.  Drivers may run into closed roads or ramps in some areas along the I-20, I-55, I-59 and I-65 corridors.

Image Sourced from Pixabay

 

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