Supply Chain Stalled by Superstorm

USA Today

November 1, 2012

Cargo stalled this week because of superstorm Sandy, threatening supply chains nationwide that depend on shipping from the Northeast and causing undetermined financial losses that continue to mount.

Airlines, which increasingly carry cargo along with passengers, say they blunted the damage by scheduling shipments around the storm and temporarily refusing perishables. Airlines and railroads were returning to service Wednesday across the Northeast and Mid-Atlantic region, except in flooded areas around New York and snowbound areas of West Virginia and Pennsylvania.

But the giant Port of New York and New Jersey, which averages 234,000 tons of ocean-borne cargo a day, remains closed since evacuating maritime facilities at noon Monday. Spokesman Ron Marsico says officials are still assessing when the port may reopen.

Cameron Roberts, whose Los Angeles law firm Roberts and Kehagiaras serves trade and transportation clients, said insurers “are going to be inundated with thousands and thousands of cargo claims” from damaged vessels, terminals and distribution facilities.

Companies seek to avoid warehousing supplies in favor of getting them when needed through deliveries. But Roberts said delaying cargo or shipping it to a different port “will cause all kinds of problems in the supply chain. … It’s inherently going to cause additional cost and disruption.”

After suspending deliveries midday Monday, FedEx and UPS each had planes landing Wednesday as the Newark and New York JFK airports reopened.

UPS worked with customers to ship inventory Friday rather than Monday, and to use express rather than ground service, says spokeswoman Susan Rosenberg. Before the storm hit, UPS moved its planes to Louisville and also had European flights head there, rather than the customary Newark or Philadelphia, she says.

FedEx flights were returning to normal by Wednesday night, along with deliveries, except to flooded areas of New York City and northern New Jersey, spokesman Scott Fiedler says. Rosenberg and Fiedler say it’s too early to gauge the cost of the delays.

Delta Air Lines closed its cargo facilities in New York’s JFK and LaGuardia, Newark and Boston at midnight Sunday, and halted cargo flights Monday at airports from Richmond, VA, to Portland, ME, according to spokesman Russell Cason. Although he couldn’t estimate the costs from the storm, Cason says shipments other than perishables were merely delayed.

Cargo also is starting to move on rails. Norfolk Southern spokesman Dave Pidgeon says crews are patrolling tracks, removing debris and coping with snow in West Virginia. “Trains are moving, but it will take some time to return to normal schedules, and we’re telling customers to expect delays to last through the end of the week,” he said.