Severe Weather Alert: Transportation Impacts 09/07/2017

Recovery efforts are ongoing in Texas-Louisiana and travel remains limited in some areas. Progress is evident in the reopening of terminals, quick repairs to rail lines, and a return to more normal vessel operations. However, a long, costly road to recovery lies ahead.

In anticipation of Hurricane Irma, some service has been disrupted in Florida.

Transportation Mode Updates from Carrier Assessments

Freight activity has resumed in some areas affected by Harvey. Harvey-related impacts may result in continued interruptions, delays, and other limitations throughout the immediate recovery phase.

Meanwhile, service disruptions have begun in Florida as mandatory evacuation orders are in place in some areas, and residents and businesses prepare for Hurricane Irma. Orders shipping to Florida today or tomorrow will likely not move as scheduled.

Active communication between carriers, suppliers, and customers is imperative for coordinating short- and long-term recovery efforts.

Many rail and trucking carriers are providing additional notices of disruptions and service outages on their websites.

BULK: Facilities in the Texas/Louisiana have begun restoring operations. In Texas, tank cleaning facilities continue to adjust hours and experience temporary closures due to conditions left by Harvey. Tank wash providers in Savannah are currently developing operating contingencies ahead of Hurricane Irma.

TRUCKLOAD: Volume freight into the Houston market may continue to experience pickup limitations this week and out-of-route miles can be expected.

LESS-THAN-TRUCKLOAD: As the majority of facilities in Texas come back online this week, carriers may begin reducing and/or lifting restrictions to allow for pickups going to all points in Texas. Carriers are working to clear up any backlog throughout this week.

INTERMODAL: Intermodal providers may be restricting intermodal traffic south to Miami until further notice Intermodal shippers can expect 72+ hour delays for all traffic into or out of Florida.

Rail: Rail services continue to experience some interruptions.

BNSF

Rail service on most BNSF subdivisions in the Houston area and throughout southeastern Texas has been restored. All BNSF rail yards and facilities in the region are also open.

  • Longview and Silsbee Subdivisions near the Louisiana border are out of service
  • Direct rail service between Houston and locations in Louisiana, which includes access through Dayton and Beaumont, remains blocked
  • Ongoing challenges involving the primary rail line that provides access to locations southwest of Houston, including Corpus Christi and Brownsville.
  • Major bridge repair work is needed near Sweeny, Texas and will require an extended track outage
  • BNSF is re-routing or diverting as much traffic as possible around affected locations
    BNSF is not servicing customer facilities that have yet to restore operations

BNSF Service Update – Hurricane Harvey

FLORIDA East Coast Railway –

The Florida East Coast Railway is shut down until further notice.

KANSAS CITY SOUTHERN –

Delays should be expected on all routes for some time while the railroads work to reduce backlog and respect imposed speed restrictions.

  • Rosenberg subdivision reopened permitting cross-border traffic to and from Houston (Kendleton)
  • The Beaumont subdivision remains closed at this time but conditions are improving
  • South and Northbound cross-border embargoes for locations of Houston, Corpus Christi, Victoria, and Rosenberg to and from Laredo have been lifted.

KCS Service Update – Hurricane Harvey

UP

As of today, much progress has been made. The UP has just 50 miles of track out of service and 420 route miles affected. Full recovery will take time. Reroutes create crew shortages and disrupt car flows. Many customer facilities remain closed. UP is also diligently working through the backlog of trains and car inventories.

Rail Impact and Service Recovery Efforts.

UP Service Update – Hurricane Harvey

Transportation Updates from Port, Depots, and Support Assessments

Shipping delays and transportation difficulties could continue for weeks, but vessel operations have resumed, at least on a limited scale, at all ports.

Market Impacts & Highway Updates

Market Impact

Productivity

Many businesses were closed after Harvey flooded Houston and surrounding areas. While businesses in the affected area are beginning to reopen, there may continue to be workforce limitations as staffers may have been displaced or lack access to work. A recent report shows that jobless claims surged by 62,000 during the period from August 27th to September 2nd. Economist predict joblessness could remain elevated for weeks in the aftermath of Harvey.  

Capacity

The impact of Hurricane Harvey is expected to further constrain capacity in a market that was already tight. Trucking is typically among the first industries to experience higher demand in the aftermath of a natural disaster like Harvey.  A shortage of trucking equipment should be expected for a while.

Fuel

A regional shortage of fuel products, including gasoline, diesel, aviation fuel, propane, and home heating oil due to refinery delays and interruption of delivery through pipelines as a result of Harvey will likely drive fuel prices up through the month. The prospect of Hurricane Irma may impact prices as well.

Gasoline demand in Florida is up exponentially. Gas stations are running out of fuel; however, this is not the case for diesel inventories at this time.

Pricing

Trucking shortages and high demand may start to drive up prices across the country and to a greater extent, in areas directly affected by the storm. Analysts state flatbed cost could climb as much as 15 percent and other trucking services may see increases of about 10 percent. Additionally, carriers may ask for a surcharge per load to cover extra expenses related to Harvey and to ensure that equipment is kept moving. Particularly, carriers will adjust pricing to account for delays unloading, road obstructions, traffic, and difficulty finding loads leaving those markets.

Highway Updates

At this time all interstates are open in the Houston area but many other roads remain closed due to flooding. Flooded conditions could continue through the week in the impacted areas. Officials advise drivers who come upon high waters in the roadways to seek an alternate route.

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LA