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Another hurricane could affect supply chains and freight flows this week along the Gulf Coast. Capacity in the region could tighten ahead of the storm.

Tropical Storm Zeta became the 27th named storm of the 2020 Atlantic hurricane season Sunday. Zeta will likely strengthen to a Category 1 hurricane before crossing the Yucatán Peninsula Monday night with sustained winds around 85 mph. Gusts could exceed 100 mph, accompanied by torrential rainfall. Besides delays in local supply chains, Zeta could also disrupt port operations in Cozumel and Cancún. The National Hurricane Center (NHC) has issued a hurricane warning for northern portions of the Yucatán Peninsula.

The NHC anticipates landfall in the U.S. Wednesday afternoon or evening, based on the latest forecast issued Monday morning. Landfall will likely occur in southeastern Louisiana, but could happen anywhere from the Texas-Louisiana border to western Florida.

Impact on freight

Over the past week, outbound tender volumes (OTVIW) have been increasing in several Gulf Coast freight markets in Zeta’s potential impact zone, meaning more freight is becoming available for pickup. These markets include New Orleans; Mobile, Alabama; Tallahassee, Florida; and Jackson, Mississippi.

Over the next couple of days, carriers may send even more drivers to these areas to grab loads before Zeta hits. This would further tighten capacity and possibly drive up spot rates. Coast Guard officials have not yet suspended ship-to-shore operations at any Gulf Coast ports, but in a press release they “strongly caution[ed] the maritime community to remain vigilant to weather forecasts” and “to take the necessary precautions as this weather system approaches the area.”

If Zeta hits as a hurricane, it would be the third landfalling hurricane in the central U.S. Gulf Coast this season. The others were Laura, which hit near Cameron, Louisiana, in late August, followed by Sally, which hit near Gulf Shores, Alabama, in mid-September. Residents and business owners are still recovering from those storms, so another hurricane could be devastating, prolonging the rebuilding process.

Source: Freightwaves