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Shippers and Carriers Likely Lost More Than $100 Million During New York City Snowstorm

New York City, February 1st, 2021 –– COVID-19 vaccine sites are closed, NYMTA buses are grounded, and a state of emergency is declared by Mayor Bill DeBlasio restricting all vehicles from traveling until 6 AM on Tuesday, February 2nd.

In a 36 hour long event, New York City recorded 17.2 inches of snowfall, earning the storm a place in the top 20 biggest snowstorms of all-time and the most snowfall the city had seen since the all-time record setting blizzard of 2016 (27.5").

Large snowstorms have a history of costing New York City egregious amounts of money – snow and ice removal alone can cost the city $1.8 million per inch of snowfall. In 2010 during the Boxing Day Blizzard, the city spent $14 million in overtime payments to MTA workers on a holiday weekend. A 2015 report by Time Magazine estimated that between clean-up, unpaid parking tickets, restricted public transportation, and significant decline in economic output, a severe winter storm (even one that doesn't come to fruition) can cost the city between $500 million and $1 billion.

Although difficult to analyze, supply chain and logistics operations play a crucial role in the overall impact of costly winter storms. Our team investigated just how much delays from the January 31st to February 2nd snowstorm may have cost shippers and carriers passing through New York City.

Weather's Impact on Supply Chain and Logistics

Weather-related supply chain issues cost the industry billions of dollars each year – the trucking industry alone loses more than $3 billion, with some estimates much higher. In extreme cases, like with hurricanes and blizzards, losses can be greater than $100 million per day.

Regardless of cause, delays alone are a huge headache for the trucking industry. An Urban Mobility Report from the Texas Transportation Institute (TTI) estimated that in the year 2000, the imputed operational cost of delays was somewhere between $65 and $80 per hour for the southern US. A similar study done by researchers at Texas A&M and the University of Wisconsin showed that delays to shippers cost about $56 per hour.

Weather causes 23% of all roadway delays, and leads to 32.6 billion lost vehicle hours per year. As a result, shippers and carriers lose billions of dollars annually from lost productivity and increased operational costs.

How much did weather-related delays cost the industry from freight moving through New York City?

Using our internal speed reduction data and average annual daily freight volume data from the FHWA we were able to analyze and estimate the total number of lost vehicle hours within a 25-mile radius of New York City from January 31st to February 2nd. We also factored in observed freight volume decline during this time period, which over the course of 3 days was on average 50% lower than the previous 2 weeks.

Over the course of 72 hours we estimate a total of 2,720,248 vehicle hours were lost due to heavy snowfall and high winds. Above we mapped out the estimated total truck hour delays per mile across the New York City metropolitan area to show which roadways were impacted the most by weather-related delays.

Using the research cited earlier from TTI, we were able to estimate the total carrier loss due to weather-related delays across the New York City metropolitan area as well. This includes any truck passing through the region highlighted above.

Assuming it costs carriers $65 per each hour of freight delay – this includes costs such as fuel, maintenance, unreliable delivery times, changes in workforce – we estimate that the 2.7 million lost vehicle hours likely cost the trucking industry $177 million between January 31st and February 2nd.

We mapped out the estimated cost per mile to carriers based on the estimated hours lost and the cost per hour. Sections of I-95 from Woodbridge to Elizabeth, NJ and I-495 across western Long Island were among the hardest hit by extensive freight delays.

Shippers similarly saw big losses from the 3-day snow event – using the research cited earlier from Texas A&M and the University of Wisconsin, we assumed delays cost shippers roughly $50 per each hour of freight delay. This includes increased inventory costs, missed delivery windows and can vary rather significantly based on the commodities being shipped.

We estimate that the 2.7 million total lost vehicle hours cost shippers $136 million between January 31st and February 2nd. We mapped out the estimated cost per mile to shippers based on the estimated hours lost and the cost per hour.

It's no surprise I-95 between Woodbridge and Elizabeth, NJ once again ranked at the top for shipper freight loss from this event – the corridor is located adjacent to one of the busiest shipping ports in the United States. Port Newark and Elizabeth Port Authority Marine Terminal are often referred to as just Port Newark, and account for one-third of all cargo arriving on the East Coast. Everything from sneakers to automobiles enter through Port Newark before dispersing over a vast network of highways and rail systems that includes the I-95 corridor. An estimated $200 billion worth of goods moves through this region each year.

Key Takeaways

Quantifying lost productivity and increases in operational expenses due to weather is challenging, but crucial in order to prepare for future extreme weather events.

Here are the key takeaways from our research and analysis:

  • A top-20 snowstorm hit New York City between January 31st and February 2nd, causing significant delays to supply chain and logistics operations

  • Freight volume decreased by 50% on average for the 3 days the snowstorm impacted the area

  • We estimate 2.7 million total trucking hours were lost due to weather-related delays

  • We estimate the delays cost carriers $177 million and shippers $136 million over the course of 3 days

It's important to note that this research makes several assumptions about the cost of hourly delays, the types of commodities being shipped, and the speed reduction experienced by freight over the course of 72 hours. Speed reduction estimates are based on our speed reduction index and while they represent general freight slowdowns, they are not observed history. This study is also limited to a 25 mile wide radius of the New York City metropolitan area.


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