Hurricane damage has ripple effect on transportation system
Freight transportation providers in the Gulf spent Wednesday assessing damage to their infrastructure from Hurricane Katrina and making alternative plans to serve customers, while those in the rest of the country braced for higher fuel prices due to oil supply disruption from the region.
Industry officials said supply chains are being disrupted because of damage to ports, roads and rail lines.
The American Trucking Associations issued a statement praising President Bush for loaning oil from the Strategic Petroleum Reserve to offset a drop in supply after the halt of Gulf oil production and most distribution. The oil will help refiners not affected by the storm produce various types of fuel, including diesel.
Oil prices dropped below $69 on commodity markets after Bush’s announcement, but gasoline and diesel stocks were already low and industry analysts predict a sharp spike in fuel prices. In parts of the country, regular unleaded gasoline topped $3 per gallon and analysts are warning consumers to prepare for $4 per gallon.
The storm has shut down almost half of the nation’s refining capacity and about a quarter of domestic oil production, CBS Marketwatch reported. Power shortages have prevented a major pipeline company that serves the mid-Atlantic and Northeast from pumping gasoline, jet fuel and natural gas.
The Air Transport Association said damage to Gulf refineries had cut jet fuel production by 13 percent and airlines are taking steps to conserve fuel to prevent flight cancellations. The association arranged for jet fuel to be airlifted to airports in Charlotte, N.C. and Fort Myers and West Palm Beach, Fla., to replenish low supplies, the N.Y. Times said. Atlanta-Hartsfield and Washington Dulles, two airports served by refineries in Louisiana and Tennessee are also slated to receive emergency shipments.
Motor carriers are on pace to spend a record $80 billion to fill up their tractors this year, $18 billion more than last year, according to ATA.
The South Carolina Trucking Association said it worried that some truckers might lose business if short supplies lead to rationing.
The Federal Emergency Management Agency put out an urgent call for truckers to help haul emergency supplies from supply depots around the country to the affected area. Truckers interested in volunteering their services were asked to contact FEMA trucking subcontractors Lipsey Mountain Spring Water and IAP Worldwide Services, the later of which is especially seeking reefer trucks to transport ice and other perishable materials.
DOT Hours of Service regulations for truck drivers will be suspended for drivers delivering gas to the region.
Meanwhile, Florida and Alabama lifted truck size and weight restrictions for commercial vehicles involved in the recovery. Florida raised the large-truck weight limit from 80,000 to 95,000 pounds for 60 days on certain routes. Limits were also raised for smaller trucks.
“Wind damage and extensive flooding has impacted many agriculture-producing areas and it is critical that growers and ranchers are able to salvage and transport as much of their commodities as possible to reduce their losses,” Charles Bronson, Florida’s Agriculture and Consumer Services commissioner, said in a statement.
In another effort to help truckers in the area cope with fuel shortages, the Environmental Protection Agency has granted temporary waivers allowing fuel suppliers in Florida, Alabama, Mississippi and Louisiana to sell diesel fuel that does not meet clean air standards for sulfur content. The waiver extends through Sept. 15., but retail and wholesale buyers may continue to sell the product until their inventory runs out.
Transportation-related elements of the federal response to Hurricane Katrina laid out by President Bush and his cabinet Wednesday includes a focus on infrastructure repair and a temporary waiver of some federal regulations to help speed recovery efforts.
'There's a lot of work we're going to have to do,' Bush said. 'In my flyover, I saw a lot of destruction on major infrastructure. Repairing the infrastructure, of course, is going to be a key priority.'
The Department of Transportation has dispatched a team of 66 transportation experts to support state and local officials in the damage assessment of highways, railroads, seaports, airports, transit systems and pipelines.
A statement from the DOT said it is also supporting detour planning and critical transportation system repairs.
Port officials in New Orleans issued a sobering damage assessment after touring the port. They said wharves appear to be largely intact and able to conduct cargo operations, but said the biggest difficulties to restarting work were finding dock labor to load and unload vessels, damaged or flooded highways leading to the port and the ability of the Mississippi River to receive vessels.
At the Napoleon Container Terminal about 100 stacked boxes, most of them empties, were “pancaked” in the yard, the report said. One container had fallen from a stack onto an adjacent train. A small number of containers were in about two feet of water, and officials suspected that any cargoes inside would be damaged. All four port gantry cranes were intact, although two of the new cranes lost the sides of the cabs that housed the computer hardware.
Presently river traffic is limited to tugs, barges, off-shore vessels and recover boats. River pilots and the Army Corps of Engineers will need to perform soundings to make sure channel depths have not changed before reopening the river to commercial traffic.
Some on-dock warehouses were damaged but could be used while repairs were made, the report said.
The Louis Armstrong Airport is under water. Many airlines have cancelled flights to the city.
Port officials said they were considering setting up a satellite office 50 miles away.
Maritime Administration officials are expected to brief Secretary of Transportation Norman Mineta on financial aid for the region’s ports and port assistance is expected to be discussed during a Cabinet meeting with President Bush today.
Mineta, speaking at a press conference Wednesday, said federal maritime assets were being deployed to New Orleans to help restore port operations and to provide general relief support.
Ports and shippers announced plans to divert cargo normally destined for Louisiana, Mississippi and Alabama to other ports. The Port of Houston said some ships that called the port as scheduled have unloaded their New Orleans-bound shipments there instead. At least 500 containers headed to New Orleans have been unloaded so far. The port authority said few unscheduled vessels have arrived in Houston so far, but said it expected carriers to divert vessels in the coming weeks.
The bulk carrier Indotrans Flores, scheduled to call New Orleans and Pascagoula, Miss., was scheduled to divert to Houston Wednesday night with 3,000 tons of rubber and 2,000 cubic meters of timber destined for Oklahoma.
The Port of Morehead City in North Carolina, the second-largest gateway for rubber imports, issued a statement saying it expected to pick up the slack to help tire manufacturers who depend on New Orleans, the number one import destination for rubber. Morehead City handled more than 200,000 tons of rubber during its last fiscal year.
Port officials said rubber warehouses expect to load more than double the normal number of trucks that deliver natural rubber to tire plants this week to help replace supply from New Orleans. Two ships scheduled to partially unload rubber at Morehead City before heading to New Orleans will now discharge their entire 24,000-ton loads this week, the most rubber volume the port has ever handled in one month and 25 percent of last year’s total volume. Goodyear is the port’s largest rubber customer.
Crowley Maritime said its Gulfport, Miss., terminal and office in New Orleans are closed and believed to have incurred heavy damage. Oakland-based Crowley said all of its ships, including its thrice-weekly liner service between Gulfport and Puerto Cortes, Honduras and Santo Tomas, Guatemala, will be routed to Port Everglades, Fla., for the foreseeable future.
Railroad service is returning to normal in Louisiana, Mississippi and Alabama, with the exception of the New Orleans area, Norfolk Southern said. Since the hurricane struck, crews have inspected about 1,400 miles of track and removed 3,680 trees.
“Lines are open, trains are moving and we are ready to do our part in the overall recovery,” said David Goode, NS's chairman and chief executive officer, in a statement. Company officials credited their decision to move equipment inland as a big factor in the railroads ability to quickly return to operations.
The railroad said freight that normally runs through New Orleans is being rerouted to other hubs.
Norfolk Southern said it will start repairs in the next several days on a 5.8-mile long concrete ballast trestle across Lake Pontchartrain from Slidell, La., to New Orleans, where several miles of rail were washed from the top of the bridge. Additionally, Norfolk Southern’s Oliver Yard in New Orleans was under water.
“Once we restore rail to the bridge and repair adjacent trackage, and once water recedes, we will be able to move needed materials and supplies into the area,” Stephen Tobias, chief operating officer and vice chairman said.