North American supply chains disrupted by tropical storm Harvey


The US is facing significant disruption to its road and rail transport as a result of tropical storm Harvey.

The big US trucking operations have seen their depots in the Houston region flooded and access across Texas is reported to be difficult. The Wall Street Journal is reporting that as much as 10% of US truck activity has halted and has suggested that rates could increase from between 5 and 22% across the US as a result of the disruption.

Union Pacific Railway has halted operations in the Houston area, while BNSF has also suspended its operation but said that it would be looking to resume service as soon as possible. There are a series of large rail terminals in southern Texas that are important both for the oil, gas and chemicals operations in the region and for the movement of goods into and out of Mexico. The latter could have implications for the movement of automotive traffic in and out of Mexican assembly plants, although there are re-routing options.

A further issue is the Gulf ports. Corpus Christi and Houston ports are closed which will have a significant impact, not so much on container traffic which has other options on the East coast, but for the hydrocarbon and chemical sector. Support services for offshore rigs may well be partially disrupted whilst chemical exports will be more adversely affected. The effect on offshore oil production, onshore unconventional production and the ability to move oil out of the region may have an impact on the oil price.

Once the immediate flooding has passed, reconstruction activities will see a spike in demand for road transport in particular.

Source: Transport Intelligence, August 30, 2017

Author: Thomas Cullen

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