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Breakbulk July 2018

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Page 8 of 31 July 2018 | The Journal of Commerce 9 Cover Story Breakbulk & Project Cargo requiring flatbeds to move materials to construction sites. Everything is compressed into a tighter window this year, however, because of the season beginning four to six weeks later because of weather. "The brick, the steel, the lumber, the building products only started to move [in May] because of delayed spring. We were busy in January just hauling our normal, everyday loads; now add this extra demand on top and my goodness," Brenny told The Journal of Commerce. "We lost at least one month on construction season so people were rushing to begin their projects, but there were delays be- cause we can only haul so much." For shippers, patience will be key to navigating this flatbed market. Al- though if you have been playing the spot market in recent years because the per-mile rates were cheaper than under a contract, you may find a cool reception from carriers. "If you worked with us in the lean times and listened to our early warnings about capacity, we will work with you. The shippers who played the market and kicked trucking to the back burner, it's a little too late. The only thing they can do now is pay the rates. Moving forward, what you should do is be a shipper of choice because the current market is going to last for a while," Brenny said. l email: twitter: @ariashe_joc toring rebuilding efforts because it could exacerbate the existing supply imbalance. Flatbed drivers relocating into Florida and Texas will reduce truck supply in other states. "If there are any major rebuilding projects in either state, it probably should be underway," Taylor said. Dry van and refrigerated spot rates rose exponentially in Florida and Texas last autumn, and nervous shippers began to pay more on con- tractual freight to ensure guaran- teed capacity. The snowstorms and frigid tem- peratures in the Midwest wreaked havoc on railroad shippers this winter, but now there is a spillover into the flatbed market. "We had a lingering winter in places like northern Ohio and Illinois. And so we did not cancel spring, it was just being postponed for several weeks," Montague said. In Minnesota, frost was still on the ground as of the early May. Bren- ny, whose company is based in St. Cloud, Minnesota, said that building season typically begins in April, require bits, piping, casings, tubing, blowout preventers, motors, drilling equipment, and steel coils and bars. "A few years ago, four pipelines were built in just one year, and the latest I have heard is they are out of capacity already," DAT industry analyst Mark Montague said. "What we've done is double down in that sector. And all the tax cuts have done is accelerate the investment in these sites in the basin." According to a S&P Global Platts analysis, "Permian production growth could soon be the victim of its own success." Even flatbed carriers that are not involved in the energy sector benefit when crude oil prices are higher, and conversely, shippers in unrelated industries take a financial blow. "When there is more freight activity in the oil markets, capacity tightens in our primary markets and drives up rates," Ragan said. Much of the Houston flatbed ac- tivity is tied to the energy sector, but Montague acknowledges rebuilding efforts from Hurricane Harvey are also driving business. Home Depot leased a 300,000-square-foot warehouse in Jersey Village, Texas, and Lowe's Companies leased a 244,000-square foot warehouse near Bush International Airport. Both companies opened the new facilities to handle the new demand to buy building supplies in 2018. Melton's Taylor said he is moni- "We have not seen a rate environment like this for a long, long time, if ever."

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