Businesses in southern and eastern Texas, and in southwestern Louisiana, could be looking at economic loss due to freight disruptions and loss of property from the significant flooding that Hurricane Harvey is expected to bring to the area. In fact, over 800 convenience stores are considered at high risk to be affected by flooding in Texas, and hundreds of other stores are expected to experience disruption of inbound deliveries, according to supply chain risk analytics firm Riskpulse (via FreightWaves). Stores in the Rockport, TX, area will likely see significant damage.The hurricane is expected to stall over coastal Texas and "unleash life-threatening and disastrous flooding" into next week, according to the AccuWeather Global Weather Center. The storm should make landfall along the Texas coast late Friday night as a Category 3 Hurricane. A state of disaster has been declared for 30 counties in Texas in advance of Harvey by Governor Abbott. In Louisiana, Governor John Bel Edwards declared a statewide state of emergency.
AccuWeather says the event may be "nothing short of a flooding disaster," with as much as two feet of rain expected in some areas.
Significant Impact to Supply Chain
The impact on trucking operations will be significant, according to Riskpulse. Shipping lanes from Houston to Dallas, Laredo, San Antonio, Denver and Chicago could all see disruptions. With some shippers already rushing to get product out of Houston before the storm, combined with the fact that the expected flooding comes the week before Labor Day when prices tend to be higher anyway, shipping rates are expected to rise.
Delayed and canceled shipments could also cause issues for businesses next week. Inbound deliveries to store locations between San Antonio and Houston could be "difficult if not impossible," Riskpulse predicts.
Some areas along I-10 and I-35 may be impassable, affecting up to 9,000 total shipments between today and next week.
Ships to Batten down the Hatches and Wait It Out
Gulf Coast bunker suppliers and traders are also bracing for Hurricane Harvey impacts. Some ships will likely decide to cancel fuel deliveries to ships and leave Bolivar Roads, the strip of water enclosed by the North and South jetties between Galveston Island and Bolivar Peninsula.
One bunker trader told Platt's that by the end of the storm "there may be 100 ships waiting to get in and out," while another said that they would likely "not be able to deliver to any vessels starting from Friday probably until August 31."
Harvey to Play Havoc with Fuel Prices, Too
The storm is also expected to disrupt operations at refineries along the Gulf Coast and drive up fuel prices. The US Gulf Coast is the source of about 17% of the country's crude oil output, and more than 45% of the nation's oil refining capacity is along the Gulf Coast, according to USA Today. For information on how the hurricane will affect fuel prices, read the article from our sister publication, Energy Manager Today.
