Abstract
© 2025 Elsevier Ltd.Climate shocks increasingly disrupt supply chains, yet research has focused primarily on mitigation strategies (i.e., carbon reduction), leaving adaptation strategies comparatively understudied. We begin to fill this gap by studying how transportation managers within a supply chain respond to climate-related shocks, defined as a month in which a state’s exposure to extreme temperature or precipitation events rises significantly, measured by the custom University of Tennessee Climate Index (UTCI), which combines anomalies in high/low temperature and heavy precipitation with population exposure. Drawing on structured interviews with transportation managers, we uncover beliefs that shippers tend to be less demand-responsive in the short-term to climate-related shocks, often prioritizing the desire to move freight at any reasonable cost. Motor carriers, in contrast, are more sensitive to price. To test these qualitative assessments, we regress monthly state-level truckload spot market data from the contiguous 48 states on the UTCI in reduced-form two-way fixed effects specifications, finding that a one-standard-deviation increase in climate shocks increases freight prices by 1.9%, with minimal effects on freight volume, indicating that market adjustments occur primarily through price rather than quantity. We further estimate IV specifications based on three-stage least squares (3SLS) models to disentangle the net causal effects from the reduced form specification. Consistent with our interviews, we find motor carriers are more sensitive than shippers to climate shocks. The results have important implications, offering shippers, carriers, and brokers with concrete price-change benchmarks they can use to budget transportation spend, design contract–spot portfolios, and plan capacity during climate shocks.
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Elsevier