Trucking fleets, railroads and shipping lines are rerouting cargo and setting up alternate supply lines as Hurricane Harvey promises to disrupt freight traffic across southeast Texas for days. Seaports in Houston and Corpus Christi have been closed to most ships since before Harvey made landfall Friday, and rising waters from days of heavy rains and catastrophic flooding are threatening long stretches of highways and railroad tracks, bringing freight transportation in a major American hub to a virtual standstill.
Union Pacific has halted all freight rail traffic bound for Houston and surrounding areas, while UPS has suspended freight service in Houston and Beaumont and is offering limited service as far west as San Antonio. Two Maersk Line container ships remain anchored in the Gulf of Mexico, joining oil tankers and cruise ships waiting for Houston’s port to reopen.
“The gridlock will likely reverberate beyond Texas, threatening to snarl international trade routes,” writes The Wall Street Journal (Aug. 29, 2017). Houston is a key consolidation point for imports of vehicles and appliances made in Mexico, and stores as far away as Denver bring in foreign-made goods via the city’s port. The storm affected up to 10% of the U.S.’s trucking capacity. Retailers and other shippers around the country may struggle to line up enough trucks to ship goods. And many trucks that are available are being turned over to relief and rebuilding efforts. Wal-Mart has sent more than 1,000 big rigs to hard-hit areas and evacuation centers, with most carrying water.
Shipping costs could rise anywhere from 5% to 22%, and many freight companies say they have no idea when they will resume operations.
Classroom discussion questions:
- Why did the storm in Houston have such an impact on supply lines?
- Will there be a long-term repercussion?