Flooded Texas roadways could make US shipping rates spike

Alex Scott | Bloomberg | Getty Images

A flipped over truck and flooding are seen after Hurricane Harvey hit Rockport, Texas, on Saturday, Aug. 26, 2017.

With hundreds of roads underwater and hundreds of thousands of cars and trucks stranded in Hurricane Harvey's floodwaters, Houston-area highway traffic has ground to a near halt.

Nearly 10 percent of U.S. truck shipments will be affected by the storm this week, according to freight analyst firm FTR Transportation Intelligence. That will likely produce a spike in shipping rates, especially in Texas and the surrounding area, according to FTR.

"Spot pricing was already up strong, in double-digit territory," FTR partner Noel Perry said in a blog post. "Market participants could easily add 5 percentage points to those numbers."

To try to quantify the shipping slowdown, Geotab, a Toronto company that makes tracking devices, gathered data from more than 50,000 commercial vehicles, before and after the storm slammed in to the Texas coast earlier this week.

The results, displayed in before and after animations, show an 88 percent drop in commercial vehicle traffic.

Before Harvey (Mon., Aug. 21, 2017)

After Harvey (Mon., Aug 28, 2017)

With the rain still falling, floodwaters have closed portions of the four major interstate highways through and around Houston. As of Wednesday, more than 200 roadways were either closed or subject to lane closures. As many as half a million flood-damaged cars and trucks may have to be scrapped.

The flood has also forced suspension of rail service and closed regional shipping terminals and ports.

Once the floodwaters recede, it could be days or weeks before the Houston-area transportation network is back to normal. But Geotab CEO Neil Cawse thinks the shipping industry will be back up and running relatively quickly.

"I think were going to be quite surprised at how robust things are," he said. "There's quite a lot of resilience built into the system."