By Paul Page and Brian Baskin
Trucking fleets, railroads and shipping lines are scrambling to
reroute cargo and set up alternate supply lines as Tropical Storm
Harvey promises to disrupt freight traffic across southeast Texas
for days.
The region has experienced days of heavy rains, strong winds and
catastrophic flooding since Harvey made landfall Friday night.
Seaports in Houston and Corpus Christi have been closed to most
ships since Friday, and rising waters threaten stretches of
highways and railroad tracks, bringing freight transportation to a
virtual standstill.
Many freight companies say they have no idea when they will
resume operations. The storm is expected to linger over the Texas
coast until later in the week. Even after the weather clears, it
could be days before floodwaters recede enough to allow dockworkers
back into ports, or trucks to resume normal routes.
The storm's impact will quickly radiate outward through the
nation's transportation network, affecting retailers and
manufacturers far from Texas. Other cities could see a shortage of
trucks because big rigs aren't making their scheduled trips from
Houston, and railroads could see backlogs as far away as Arizona,
said Noël Perry, chief economist at Truckstop.com, an online load
board.
Mr. Perry said nearly 10% of the nation's trucking capacity
could be affected by Harvey, and that prices to book big rigs have
jumped anywhere from 5% to over 20% after other large-scale weather
events.
"This may be unprecedented when all is said and done," said Mark
Rourke, chief operating officer at Schneider National Inc., a large
trucking company. He said it could be three days before Schneider
employees can even access some terminals in the city and
potentially two weeks before normal operations resume.
Darren Hawkins, president of YRC Freight, said the trucking
company's terminal in Houston has remained closed since Friday,
when workers were sent home, and the company hasn't decided when it
will be able to reopen.
"We have about 3 feet of standing water in the parking lot," he
said.
YRC has been holding freight bound for Texas near the origin
point since the middle of last week, adding trailers to keep goods
at sites throughout its nationwide network.
Mr. Hawkins said YRC is bringing some critical shipments needed
for relief, including generators and bottled water, to staging
areas authorities have set up around the city. But it could be some
time before operations get back to normal, he said.
"By the time the city is open again, there is going to be a
tremendous amount of tonnage going in," Mr. Hawkins said. "This is
looking like a multiday event, and so it's not over, and means the
recovery will be that much longer. With Katrina, we had almost
immediate access [after the storm surge] to the area. That's not
the case with Houston."
The storm's impact rippled out across the region. Kansas City
Southern Co. canceled cross-border service at Laredo, Texas. The
city is outside the storm's path, but the railroad had to suspend
service on a key route that comes within 30 miles of the coast.
United Parcel Service Inc. said it was suspending freight service
in Houston and Beaumont, Texas, and offering limited service as far
west as San Antonio.
Union Pacific Corp. on Sunday halted all freight rail traffic
bound for Houston and surrounding areas.
BNSF Railway routed some freight trains around the coastal
region. The railroad's major facilities handling intermodal and
automotive shipments in Pearland, south of Houston, were open but
access to the sites by road was limited and train loading and
unloading operations there were on hold.
Numerous ships scheduled to stop in Houston, including oil
tankers, cruise ships and container carriers, are anchored well
outside the storm's path in the Gulf of Mexico. Port Houston
appears to have avoided major damage, but some carriers said they
could be waiting offshore even after the weather clears because
flooded roads will keep dockworkers from reaching the port, or
trucks from carrying cargo out.
"We've diverted to New Orleans and are waiting for
instructions," said Aristos Pitsilis, the executive officer of a
Greek-owned oil tanker. "We are supposed to load up in Houston, in
Corpus Christi, early Sunday, but nothing still goes in or out.
We've been told that maybe tomorrow we'll make our way."
Maersk has two container ships waiting for Houston's port to
reopen so they can unload their cargo. The company hasn't decided
whether to divert them to other ports, a spokesperson said.
Flooding could also lead to rising levels of silt in the Houston
ship channel, said Paul Bingham, a trade economist with Economic
Development Research Group Inc. Port pilots, who board incoming
ships and navigate them up the channel, will likely be hesitant to
run vessels through a shallower channel until the Coast Guard has
had a chance to test the depth.
The solution for the time being, Mr. Bingham said, will be to
load ships lighter -- meaning they may end up having to carry less
than their capacity of petroleum products, bulk goods and
containers. For container cargo, that could mean shipping companies
would have to unload more goods at other ports before visiting
Houston.
--Erica E. Phillips, Paul Ziobro and Costas Paris contributed to
this article.
(END) Dow Jones Newswires
August 28, 2017 14:15 ET (18:15 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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