Hurricane Harvey: Transportation Impacts 08/30/2017

Hurricane Harvey will have a significant effect on the transportation industry in the coming weeks, the largest of which will primarily be regionalized. Analysts predict that Harvey will likely be far more impactful to the freight markets than other major hurricanes had been previously. It may be a while before the totality of the damage caused by Harvey and its aftermath is realized. Presently, the impact of this storm has been strengthened to new heights by a four-day downpour of torrential rain over the Houston area, compromised levees, and multiple landfalls in Louisiana early Wednesday morning.

Transportation Mode Updates from Carrier Assessments

Carriers are anticipating substantial impacts on freight moving in and out of the affected areas for weeks to come. As, such open and active communication between carriers, customers, and service providers is encouraged.

Bulk: Carriers’ day-to-day ability to operate, and to what extent, varies largely due to continued rainfall and road closures in the affected areas. Service limitations exist in the form of complete “lockdowns,” tank cleaning closures, and the re-sourcing of shipments to other locations. Special delivery requests may be treated under essentially “a dedicated service support option” by some carriers and result in additional out-of-route miles charged.

Truckload: Carriers continue to monitor and adjust to the catastrophic event occurring in Texas and Louisiana. To provide both plausible and feasible solutions to customers, shipments will require communications prior to acceptance. Loads need to be tracked and traced every few hours. Capacity is extremely tight. Some operations have seen outbound TX loads at almost $4 per mile and inbound loads at even higher rates.

Less-than-Truckload: Although Houston and the surrounding parts are the most immediate area impacted, the capacity disruption stretches nationwide. Service to business into/out of Texas and Louisiana is dependent on road accessibility and shipping/receiving sites’ operational status. Carriers may move to a spot price for everything into/out of those states (at least through Sept. 5) while constantly reviewing the situation to adjust back to normal as quickly as the market allows. 

Intermodal: Local (Houston) facilities currently may not be operating. A return to service for local pickups or deliveries is not projected before Tuesday, Sept. 5 as continued assessments of roads in the area are underway.  Additionally, there have been reports of flatbed drivers dropping trailers to move POWER ONLY Disaster Relief loads.

Rail: Rail traffic into and out of the Houston area has been suspended at this time.

BNSF – Widespread flooding in the Houston area and other parts of southeastern Texas continues to cause major disruptions to rail service and BNSF operations in the region. Several BNSF subdivisions remain out of service due to multiple washouts and high water reported. All traffic destined to/originating from Houston, as well as traffic scheduled to route through Houston, remains suspended. All operations at BNSF Houston-area railyards and facilities, including the Pearland Intermodal and Automotive facilities, are also suspended as road closures continue to limit access to these locations. There is currently no estimate on when these facilities may reopen.

Given the size and scope of this historic flooding, normal train flows in the area are not likely to resume for an extended period. Customers should expect continued delays on shipments scheduled to move through the area.

BNSF crews will be conducting inspections and beginning repair work today in some locations. BNSF Service Update – Hurricane Harvey

Canadian Pacific – A number of embargoes have been issued by Foreign Roads due to extreme weather conditions in the Texas area given the impact of Hurricane Harvey. Customers with loads or empty private cars to move are encouraged to bill shipments to alternate locations not impacted by the embargoes where possible. All other traffic will need to be held at the current location.

Kansas City Southern – Lane closures between Kendleton, TX (Houston) and Laredo, TX, resulted in a Force Majeure being declared for KCSR and KCSM and an embargo for impacted areas on the KCSR network. These remain in effect. KCSR Service Update – Hurricane Harvey

Norfolk Southern – Due to the historic rainfall and flooding resulting from Hurricane Harvey in the Gulf region, Kansas City Southern (KCS) has declared Force Majeure and has issued an embargo on all shipments destined to Laredo and Mexico. As a result, Norfolk Southern stopped accepting shipments at all origin facilities destined to Laredo and Mexico as of 11:00pm EDT Monday August 28th.

All shipments in-gated prior to the aforementioned gate closures will be loaded onto railcars, staged, and advanced to destination once the routes to Laredo and Mexico are deemed safe for movement. NS will not be able to unload and return shipments once they have been loaded. NS Service Update – Hurricane Harvey

UP – Rail operations along the Gulf Coast from Brownsville, Texas to Lake Charles, Louisiana are currently suspended due to high water and storm damage. Routes through San Antonio are opening up which will allow trains to run both north and south between San Antonio and Hearne, Texas. The Laredo gateway remains open to interchange traffic with the Mexican railroads. Livonia and Avondale shipments destined to points west of Tucson into California normally traveling through Houston will be re-routed around the flooded areas. Embargoes have been issued on all rail traffic destined to stations on the Gulf Coast and inland that comprise the Houston Service Unit. Active Union Pacific embargoes can be viewed here. The embargo is for all rail traffic, including intermodal equipment and automotive shipments. Customers should consider diverting cars away from the impacted area. UP Service Update – Hurricane Harvey

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.

Market Impacts & Highway Updates

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
  • Productivity could decrease due to out-of-cycle supply chain demands
  • Suspended rail service
  • Closures of regional shipping terminals and ports
  • Chaotic supply chains due to extra shipments and lower productivity

Highway Updates

Approximately 250 roadways in southeast Texas are currently experiencing flood conditions. Travel is not advised in the affected areas due to rapidly changing water levels and unsafe conditions. Please see link below for specific details.

  • Houston-area interstates (I-45, I-10 and I-69), as well as US 290 and US 90 all have closures. TX Roadways Impacted By Harvey
  • Louisiana roadways reporting flooding/closures:
    • I-10 WB, I-55 in both directions,
    • US 90
    • LA1077, LA661, LA 316, LA 3147, LA397, LA3020, LA101, LA91, LA713, LA394, LA113
    • LA Roadways Impacted By Harvey