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Reflections from Jen…
Hurricane Harvey and its environmental and business impacts understandably dominated our news coverage this week. Businesses in the southeastern part of Texas suffered (and will continue to suffer) from closures, destruction of business and property, logistics disruptions, debris and hazardous waste removal issues, water toxicity issues, and the list goes on.
The extent of the long-term effects of the storm are impossible to predict, most experts have been quick to say. But one area certain to suffer for the next several weeks is the logistics industry and those who rely on it. Disruptions in that area of Texas, know as a grain transport hub and nexus for cross-border traffic with Mexico, will affect industries as diverse as automaking and farming, writes Reuters.
Earlier in the week, freight transportation there was at a standstill, with port terminals, major highways, rail lines, airports, and trucking docks shut down, while cargo remained stuck in warehouses and on inbound ships. Port Houston, the international port of Texas, closed operations last Friday and just opened today (Sept. 1).
So what happens next in terms of logistics? Well, it comes down to delays and price increases. Union Pacific Railroad, for example, said that as of Wednesday, it was delaying shipments destined for Brownsville and 36 Texas rail stations, in the Beaumont and Orange areas, including Port Arthur, wrote Business Insider.
And now that Port Houston is open again as of today, Houston-area drayage rates will likely spike “about three days after the port opens up,” says Jason Hilsenbeck, president of Drayage.com and LoadMatch (via JOC.com). That puts it just about smack on Labor Day, a holiday that will cause additional shipping delays.
Noel Perry, partner at freight analyst firm FTR, also predicts price increases. “Look for spot prices to jump over the next several weeks, with very strong effects in Texas and the South Central region,” he said. His organization reported that annualized trucking rates rose an average of 7% after Hurricane Katrina caused devastation in 2005.
Port Houston says its Barbours Cut and Bayport terminals have resumed operations. The website informs visitors: “the gates are open Friday, 0700 – 1700, in-gate closing at 1600. Vessels will be worked as they are cleared for transit.” Port Houston also reported that both the upper and lower levels of the Turning Basing facilities are open for operations, and Jacintoport is open for business.
On Labor Day, Port Houston says, vessels will be worked at Port Houston Container Terminals. Gate operations TBA.
Union Pacific Railroad said on Thursday that some rails to the north and south of Houston have been repaired, but many routes were still being inspected. The railroad also said switching operations will begin over the next two days in primary rail freight yards in the area. Union Pacific and other major railroads have said it may be a long time before normal operations are resumed. Without a historical precedent – the storm was the most powerful hurricane to hit Texas in 50 years – the duration of disruptions is difficult to predict, but one rail broker was willing to make a guess: “I expect services to be disrupted anywhere from two to six weeks,” said Thomas Williamson, owner of Florida-based rail broker Transportation Consultants Co.
Of course, with some of the country’s largest refineries to shut down, the storm significantly slowed production. Flooding caused by Harvey forced refinery closures including some owned by Exxon Mobil, Shell, Phillips 66 and Petrobras. Over the weekend, as much as 25% of the oil and gas produced in the Gulf was halted. “We just simply don’t know yet the damage all this rain will have on Houston’s energy infrastructure,” Andrew Lipow, president of energy consultancy Lipow Oil Associates LLC said. “Refineries in Texas could be offline for as much as a month, if their storm-drainage pumps become submerged.”
And yesterday, Energy Secretary Rick Perry announced the release of 1 million barrels of crude oil from the federal Strategic Petroleum Reserve in response to refinery outages caused by Hurricane Harvey. With close to half the country’s oil refineries located on the Gulf Coast, the DOE move is intended to help offset fuel shortages in the hurricane’s aftermath, the Houston Chronicle reported.
So much more could be written about the business and environmental effects of the storm, but I just realized I’ve been down the rabbit hole reading media coverage for a couple of hours. And I haven’t even touched on the question that is in everyone’s mind (at least all of us working in sustainability), which is: did climate change cause Hurricane Harvey, and can we expect more disastrous weather events like this?
As for the first question, at least one article (from the NRDC) says climate change didn’t cause Harvey, but made it much, much worse. And as for whether we can expect more to come? Well, for now, keep an eye on Hurricane Irma, which was upgraded to a Category 3 storm last night, is likely to reach Category 4 soon, and is expected to hit the East Coast next week, writes The Verge. And in future days, stay tuned for a series of special reports we’ll be publishing on how to prepare for weather events like this – and how to deal with the aftermath – in terms of the environmental aspects of your business (stormwater management, waste management, etc.).
Finally, because this is technically my editor’s note and not a strict news article, I feel compelled to address the non-business-related side of Harvey. With the death toll from Harvey at 47 as of yesterday, and certain to rise, it has been difficult at times this week to stick to “just the facts, ma’am” when writing about the storm. Speaking for all of us here at Business Sector Media, our hearts go out to those affected by the hurricane.