Hurricane Harvey – Transportation Impacts: 08/28/2017

Hurricane Harvey and its aftermath are interrupting truck, rail, sea, and air transport, as well as activity at warehouses and chemical plants in the impacted area. The return to normal operations after a natural disaster like Hurricane Harvey can take time. Operational/service impacts from road closures and blockades, equipment relocation, infrastructure damage, and customer operations all can amount to additional strain on an already constrained industry. Vessel and trucking delays are expected at least into the next week or two as the area recovers from the storm and work around the upcoming Labor Day holiday.

1. Transportation Mode Updates from Carrier Assessments

Carriers are reporting service outages or limitations in the hardest hit areas due to flooding, blocked roads, terminal closures and lack of personnel.

Bulk: Facilities in affected areas may be shut down, while other operations have restricted the inbound flow of trucks into the greater Houston area to ensure driver safety.  In many cases, facilities may be unaffected, but workers are not able to safely reach these locations due to neighborhood flooding and road closures. Logistics service providers expect indirect impacts to the transportation infrastructure will be felt nationwide as trucks arriving from Texas for loading in other parts of the country will be severely limited.

Truckload: Carriers have activated emergency contingency plans and are working within the confines/limitations of the authorities (shelter-in-place; banning non-essential travel on certain roadways), customers (closures, limited personnel), and current conditions (impassable roads). Some service providers have closed operations in Houston, Corpus Christi, and Beaumont and limited service in Austin and San Antonio.

Less-than-Truckload: The impact of Hurricane Harvey will continue to cause system-wide disruption in Southeast Texas; we believe that this may ultimately extend to the State of Texas and beyond as carriers begin to deal with the impact of cargo overload caused by the storm. All customers should anticipate an extended period of service interruption in this region, with pick-ups discontinued until existing deliveries and distribution warehouse capacity issues are addressed.

Rail:

BNSF – Both Houston (Pearland) Intermodal and Automotive are open; however, road conditions are preventing access to the facilities and only emergency-related travel is advised. Train loading/unloading operations are currently suspended. Customers should expect continued delays on shipments scheduled to move through the area. BNSF operations teams are re-routing some traffic to minimize disruption as much as possible. BNSF Service Update – Hurricane Harvey

UP – Union Pacific is issuing embargoes, beginning with all traffic destined to Houston and surrounding areas. Customers should also consider diversions of en-routes where feasible. Trains are being annulled for today, at a minimum. Facility switching in Houston and surrounding areas will remain suspended for at least another 48-72 hours. UP Service Update – Hurricane Harvey

Kansas City Southern – Service suspended between Houston and Laredo; cross border traffic embargoed at Laredo and Brownsville/Matamoros. KCSR has registered an embargo from connecting carriers to specific service areas as well. KCSR Service Update – Hurricane Harvey

2. Transportation Updates from Port, Depots, and Support Assessments

Vessel Traffic at the ports will reopen when channels have been deemed safe by the US Coast Guard.


3. Highway Updates & Market Impacts
 

There are thousands of roads that are flooded throughout Texas. It could be 7-10 days before water starts to recede.

  • Houston-area interstates (I-45, I-10 and I-69), as well as US 59 all have closures.
  • Austin, San Antonio and Dallas are in relatively good condition with I-35 open all the way to Laredo.

Market Impact

  • Spot rates are expected to spike
  • Capacity tightens as trucking companies allocate resources to assist in relief efforts
  • Long-term disruptions could drive fuel prices higher in the weeks ahead

 

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