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Bridging The Gap
UPS, FedEx halt delivery to major areas of Texas, Louisiana amid Hurricane Harvey havoc.
  Tuesday 29 August, 2017
UPS, FedEx halt delivery to major areas of Texas, Louisiana amid Hurricane Harvey havoc.

Shipping giants UPS, FedEx and the United States Postal Service have indefinitely ceased delivery to major swaths of Texas and Louisiana amid Hurricane Harvey devastation, potentially disrupting supplies of critical medicines, food and other packages.

The ferocious flooding that's pummeled the region is preventing or severely limiting the major delivery companies from reaching hundreds of cities and thousands of neighborhoods.

The U.S. Postal Service, famous for its commitment to delivering in bad weather, said it had suspended service at "several facilities" and temporarily closed dozens of Post Offices.

"When you think about all the families and small businesses that are impacted — just the sheer number of zip codes that were impacted — it’s pretty astonishing," UPS spokesman Matt O'Connor said.

Online giant Amazon.com said it had temporarily shuttered its Houston-area facilities and that many local customers "should expect delays" in packages "until the floods subside."

The storm may also have damaged some delivery infrastructure, though it's too early to assess the full extent of the impact.
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Although it's unclear how many residents are awaiting packages, the outages raise serious concerns about vulnerable residents who rely on just-in-time delivery of mail-order prescriptions and other goods.

Harvey, which is now considered a tropical storm, has knocked out or significantly limited UPS delivery to more than 730 zip codes in Texas and Louisana, the company said. O'Connor said the company had made its employees' safety its top objective.

FedEx temporarily suspended air delivery to more than 350 cities and temporarily suspended or dramatically cut back ground delivery to more than 490 cities. Large cities without either option included Houston, Corpus Christi and Galveston.

"Our priority is always the safety of our team members and providing service to our customers," FedEx spokesman Jonathan Lyons said in a statement. "FedEx has implemented contingency plans to lessen the effect of Hurricane Harvey on operations and mitigate potential service delays."

It was not immediately clear how the delivery outage was affecting online delivery of certain critical products such as prescriptions.

For customers not able to receive mail-order prescriptions, CVS spokesperson Stephanie Cunha said the company "is able to provide one-time emergency refills" at stores with 10-day supplies "for plan members in impacted areas."

About 180 of the company's 770 stores in the Hurricane Harvey affected areas are currently closed.

"CVS is working diligently to resume operations as soon as it is safe for both our employees and customers," Cunha said in an email. "In addition, we will have our mobile pharmacy unit moved into the area once it is safe to do so."

A Walmart spokesperson was not immediately available for comment Tuesday afternoon. A Walgreens spokesman pledged to provide information as soon as possible.

Many neighborhoods in Texas are not reachable because of flood waters. And others aren't being serviced because local shipping centers were temporarily shuttered due to storm planning or lack of employees.

We are continuing to monitor the situation closely, communicating with employees to determine their needs and safety, and working with response teams to support their efforts," Amazon told USA TODAY in a statement. "Our thoughts and hearts are with our southern Texas family today.”

UPS spokesman O'Connor said it's too early to assess whether the storm has caused any damage to the company's facilities or packages.

"We have so many facilities that are in those areas, it’s really difficult to be able to talk in any level of detail," he said.

The storm has significantly disrupted shipping corridors, including temporarily shuttering the critical Houston Shipping Channel.

Several major ports have also temporarily closed, including Houston, Texas City, Galveston and Freeport, according to the Department of Energy.

"The current extraordinary weather situation created by Hurricane Harvey may cause many ocean vessels to divert from their intended port of unlading to other port locations for discharge purposes," the U.S. Customs and Border Protection said in a statement.

Other impacts:

CHEMICALS: Goods made with plastics based on petrochemicals such as ethylene and propolene could face sporadic supply chain disruptions and retail price increases in the coming weeks, PetroChem Wire executive editor Kathy Hall said.

"They’re like the crude oil and natural gas of chemicals," Hall said. "You can’t make anything without them."

The storm has disrupted nearly half of the nation's petrochemicals production capacity, she said. Many of the sites shut down in advance of the storm to brace for impact.

Plastics product manufacturers could draw upon built-up inventories to make goods for a while, but may run out within weeks, she said.

"The impact is severe," Hall said.

AUTOS: Dozens of auto dealerships in the Houston area temporarily closed, including all 18 of the stores owned by the country's largest dealership chain, AutoNation.

At Ford, "we know for certain that many dealers have sustained significant damage," spokesman Said Deep said.

Toyota spokesman Scott Vazin said the automaker had not received any reports of damages to vehicle inventories, but acknowledged that it "could be too soon to concretely say."

"Dealers are continuing to assess conditions and have adjusted operations, as needed," Vazin said in an email. "We do know that some of our dealers and associates are personally impacted, but await more details."

Vehicle production appeared to be largely unaffected in the early going. GM, Ford and Toyota said their manufacturing operations, which typically rely upon just-in-time delivery of parts, had not been affected.

But overall industry sales will take a hit. Edmunds.com analyst Jessica Caldwell estimated that automakers would sell 2% fewer vehicles than expected in August due to Harvey, and the impact will likely continue into September.

But retail demand could pick up in the coming months as consumers replace damaged vehicles and make purchases they had intended to complete earlier.

ENERGY: Gasoline prices were set to rise 10 cents to 20 cents per gallon within the next several days, GasBuddy.com analyst Patrick DeHaan said.

Outages at Texas Gulf Coast refineries and disruptions to shipping corridors are fueling the price increases, although historically high gasoline inventories are likely to somewhat mitigate the impact.

Five refineries in Houston area and six in the Corpus Christi area were closed as of Tuesday morning, representing more than 12 percent of the nation's refining capacity, according to the U.S. Department of Energy and the American Petroleum Institute.

Another seven refineries in the region were operating at reduced capacity, according to the DOE. Outages included Exxon's massive refinery in Baytown.

RETAIL: Nate Herman, senior vice president of supply chain for the American Apparel & Footwear Association, said retailers would be affected by increased shipping costs or lower consumer spending as a result of higher gasoline prices.

“However it (is) too early to say when and if that will happen," Herman said in an email.

And any impact would not immediately — if ever — lead to empty shelves or clothing racks.

"But in theory it should be weeks or months down the road when anything would be felt," says Lloyd Wood, spokesman for the National Council of Textile Organizations. "People have inventory in stock. You won’t know what the disruptions truly will be like until some of these flood waters recede and people get a chance to get in and start inspecting things.’’

Some retailers will be affected by the UPS, FedEx and USPS outages.

Zales, the chain that sells diamond engagement rings along with other jewelry, said packages to areas affected by the hurricane may be delayed.

Source: https://www.usatoday.com/story/money/2017/08/29/ups-fedex-usps-hurricane-harvey-amazon/613027001/

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