(With contributions from FreightWaves staff members Joanna Marsh, Nick Austin, Zach Strickland, John Gallagher and Mark Solomon).
Hurricane Delta is heading into Louisiana as a Category 2 storm and with limited impact seen on the logistics sector. Here’s a wrap of where it has had — or has not had — impact on supply chains.
— The commodity price of ultra low sulfur diesel on CME did close out the week several cents higher than where it stood at the close of last week and in fact has had one of the highest increases percentage-wise in several months. Most of that increase came earlier in the week, when between Monday and Tuesday, ULSD on the CME rose almost 10 cents per gallon, to $1.1886 a gallon over two days. For the week, ULSD prices rose just under 10%, the largest five-day percentage increase since early July. But the vast majority of that gain came Monday and Tuesday when fears of Hurricane Delta’s impact and where it might land were running high. As the storm weakened and its track steered it between the refining centers of Lake Charles and Beaumont to the west, and New Orleans to the east, fears of a refinery-driven spike receded. But with 91% of Gulf of Mexico oil production shut in Thursday, according to the Bureau of Safety and Environmental Enforcement, oil markets in general have been bullish over the week. That helped keep ULSD from sliding even though the refining impact from Delta looks nonexistent. The final number for the week: $1.1933 per gallon.
— The coming storm is believed to be the reason for a sharp spike in SONAR’S Outbound Tender Rejection Index for New Orleans. By Thursday it was up to 33.45% but had stood at 26.05% a week earlier. The state of the market was discussed on FreightWaves Now Friday by FreightWaves market analyst Zach Strickland.
–Several LTL and parcel carriers have shut down some deliveries. UPS is not providing pickups and deliveries to 107 zip codes in Louisiana and three in Texas. FedEx Express is not serving 100 cities in Louisiana. FedEx Ground has suspended services to more than 100 cities in Louisiana and 45 in Texas. YRC has what it called “limited operations” at terminals in New Orleans, Baton Rouge and Houston.
— The heaviest work of the American Logistics Aid Network generally kicks in after the storm as it supplies an impacted area with equipment and other storm-related goods as they try to recover. ALAN Executive Director Kathy Fulton cautioned that “in a hurricane season that’s had a massive number of named storms it’s tempting for businesses not to be quite as concerned about the latest one simply because there have been so many already. But that’s a scary prospect, because it’s never safe or smart to ignore the potential dangers and damage of a storm like Delta.” She added that “all signs suggest it could be an extremely destructive” storm and added that she hoped this was the final time ALAN would need to gear up for a hurricane.
— Railroads active in the region are taking their usual precautions. Union Pacific listed a series of steps it has taken, including “curtailing operations in parts of southern Louisiana and southeast Texas,” getting generators and ballast trains in place and putting some crews on standby. CSX said it is “closely monitoring” the storm and taking “precautionary measures” to protect its physical and human assets. Norfolk Southern said Thursday that interchanges in New Orleans were open but that some local movements have been impacted.
— As of 2:30 p.m. Eastern, the Louisiana Department of Transportation was not reporting any significant outages on major interstates, including Interstate 10, which runs east-west across the state. “DOT crews are monitoring weather forecasts and are prepared to address any roadways that are affected by weather conditions, the state’s Department of Transportation said on its webpage that features road closures when they are in effect. “In the event flooding occurs, personnel will make the appropriate decisions to close roadways and moveable bridges, as well as suspend or reduce the ferry services for the safety of the traveling public.”
— As FreightWaves’ Nick Austin reported earlier, there have been limited restrictions placed on port traffic in Louisiana. The state’s major ports are at port condition Yankee, which allows the ports to stay open but restricts some movement within them. The next step would be level Zulu, which closes the port.
— For the fifth time this year, the Federal Motor Carrier Safety Administration has granted an Hours of Service waiver to allow freer truck movement during the storm. This time, it’s for Alabama, Florida, Mississippi, Louisiana and Texas.