Hurricane update: Impacts on the supply chain

Source: American Shipper
Date: 28th September 2022

Florida ports and airports shut down as Ian makes landfall.

Wednesday’s news on Hurricane Ian and its impact on various sectors of the freight industry from reports by reporters and market experts, as well as pertinent social media posts.

Hurricane Ian, a major Category 4 storm, came ashore Wednesday afternoon in Fort Myers, Florida, and transportation is feeling the effects, with road and port closures in effect.

In addition to the Tampa-area ports that were closed Tuesday, Orlando International Airport closed at 10:30 a.m. Wednesday. Tampa airport has left behind a team to assess runway conditions and clear hazards once the storm passes.

Delta Air Lines has extended its embargo on all shipments at Florida airports, including Miami and Orlando, until the end of Saturday. That means no cargo will be accepted or can be picked up at its terminals. Effective Thursday through Sunday, Delta Cargo will not transfer cargo at the Jacksonville, Florida, airport, and effective Friday through Sunday, the company will not transfer cargo at the Charleston, South Carolina; Savannah, Georgia; or Tallahassee, Florida, airports. In Atlanta, its main hub, Delta is embargoing premium services such as premium, express, human remains, and live animals.

Port Miami’s two main container terminals were closed Wednesday. Seaboard Marine said it will only be open for landside operations.

Port Canaveral is closed and has ceased all waterside and vessel shoreside port operations until further notice.

Jaxport in Jacksonville, Florida, was slated to close at noon Wednesday.

Ship-position data shows that container vessels in the queue off the Port of Savannah in Georgia are weighing anchor and heading out to sea.

On Wednesday, the Georgia Ports Authority said the Port of Savannah’s Garden City Terminal will provide day operations through Thursday, with truck gates opening at 4 a.m. and closing at 6 p.m; there will be no night gates Thursday. The cutoff time for container pickup Thursday will be 4:30 p.m.; cutoff time for container drop-offs will be 5 p.m.

Savannah’s Ocean Terminal will operate as normal from 7 a.m.-5 p.m. through Thursday. The Port of Brunswick will also maintain normal operating hours from 7 a.m.-5 p.m. through Thursday.

Meanwhile, the South Carolina Ports Authority said all marine terminals will operate at normal hours Thursday but all will be closed Friday.

CSX and Norfolk Southern haven’t closed their rail terminals yet, but things could change as Hurricane Ian approaches.

In a detailed Tuesday update, CSX (NASDAQ: CSX) said it was securing rail assets and it noted that customer shipments are likely to be delayed until the storm passes. Operations at several CSX intermodal terminals, Transflo transloading terminals and TDSI auto handling terminals have also been suspended.

CSX’s Tuesday update detailed which terminals have suspended operations. They include terminals located in central Florida and nearby Tampa.

“Additional terminal closures may be necessary as the storm tracks northeast across Florida. Current forecasts predict tropical storm force winds and potential flooding over much of the state. CSX will continue to monitor storm conditions and provide timely notifications of service impacts and terminal closures as warranted,” CSX said.

Norfolk Southern (NYSE: NSC) said it is operating as scheduled, although high winds and heavy rains could impact rail operations later this week. The railroad said in its service advisory that it is positioning generators and equipment in advance of the storm, and it will provide updates as conditions change.

Interstate 75 is not closed. A spokeswoman for the Florida Department of Transportation said a map of the state’s traffic at the Florida 511 site can show a road as closed if there is no traffic on it, which appeared to be the case earlier. But later versions of the map did not appear to show those closures. Other videos on social media suggest the interstate remains open.

There are other road closures. For example, the Sunshine Skyway bridge over the southern end of Tampa Bay, which is a part of Interstate 275, is closed. Florida Gov. Ron DeSantis said several local bridges are closed because of wind danger.

Florida has suspended tolls on certain portions of Florida’s Turnpike, including around the Tampa area and central Florida near Orlando.

A warning has been issued to oil companies on Wednesday morning for using Hurricane as an excuse to raise gasoline prices.

A wholesale diesel price in the heart of the hurricane’s path did show a significant increase from Tuesday into Wednesday, but it’s an amount that can be explained by movements in the futures markets.

The final part of the supply chain where oil companies set the price is the wholesale level. Decisions about retail prices are in the hands of the individual station operators. The average wholesale diesel price from Tuesday into Wednesday in Tallahassee, Florida, per the ULSDR data series in SONAR, rose to $3.344 from $3.222, an increase of 12.2 cents per gallon.

But wholesale prices track both spot market prices and futures prices, which in turn are highly correlated, and the ultra-low sulfur diesel price on CME Tuesday rose 13.08 cents per gallon. So the increase in the wholesale price in Tallahassee was actually less than the increase in diesel futures prices.

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