A synthetic control approach to examining the effects of major hurricane landfalls on the US long-haul dry van truckload spot market

After a major hurricane landfall, the dry van truckload (DVTL) spot market plays an important role in disaster relief for affected communities and maintaining the stable flow of goods for supply chains. This study uses the synthetic control method to obtain causal estimates of the effects of five major hurricane landfalls on inbound and outbound long-haul DVTL spot prices and volumes. Drawing on adjustment cost theory from economics and the importance of truck routing networks in efficiently providing capacity, this study develops a middle-range theory which posits that hurricane landfalls increase inbound prices while reducing outbound truckload volume from the hurricane-affected state. Conversely, the theory predicts conflicting and countervailing forces determining inbound truckload volume and outbound pricing from the hurricane-affected state. To test these predictions, we use DVTL spot price and volume data from a large provider of spot freight marketplace data merged with FEMA data to identify major hurricane landfalls. The study finds that major hurricane landfalls did not significantly influence trucking spot market outcomes of the hurricane-affected state compared to the synthetic control. Post-hoc analysis indicates hurricanes often correlate with significant nationwide market volatility, making precise inference challenging.