Winter storm in Texas tightens truck capacity and lifts spot rates

In mid-February 2021, a severe winter storm swept across much of the U.S., and Texas was hit hardest. Roads closed, the state's power grid buckled and millions of residents lost electricity for days. Freight networks slowed with them.

According to DAT Principal Analyst Dean Croke, national dry van spot rates rose about 20 cents a mile in the week of the storm compared with the week before, as capacity tightened. He described the market in an update on Feb. 23, 2021.

What happened on the road

Trucking companies parked trucks and closed terminals during the ice. Railroads shut intermodal gates. At truck stops, diesel pumps stopped working, fuel filters iced up and batteries failed. Croke said that when equipment fails in cold like that, capacity across the whole system slows down.

Parts of Interstates 10 and 40 east of the Mississippi River closed, and traffic slowed to a crawl elsewhere.

In Texas, long-haul deliveries fell 36% from the week before, according to Omnitracs data. DAT reported load-to-truck ratios in the state as high as 5.4 for dry vans and 11.9 for reefers.

Croke said storm-hit markets generally saw more freight coming in and less going out. In Dallas, inbound volume jumped 54% week over week while outbound fell 6%.

DAT Chief Scientist Chris Caplice noted that Texas was not used to that kind of weather.

A blip, not a turning point

Analysts said they did not expect the storm to change the freight market over the long term. DAT described it as a blip, and Caplice expected national dry van rates to settle toward the end of March. Omnitracs' Ashim Bose said he expected a quick rebound once weather, power and roads improved.

The bigger force in the market was still the pandemic. Consumers were spending on goods rather than services, which kept truck freight demand high. Census Bureau estimates put January 2021 retail and food service sales 7% above a year earlier. Caplice said the open question was whether that demand would last after the pandemic.

What it meant for carriers

For carriers, the storm was a reminder that sudden weather can create short, sharp rate spikes, and the Texas reefer ratio showed how tight temperature-controlled capacity became. It also showed the operational cost: frozen fuel systems, dead batteries and closed fuel islands can take trucks off the road just when rates are highest.