Hurricane Ian update: Impacts on the supply chain 28/09/22

Hurricane Ian, which has intensified into a major Category 4 storm, started coming ashore in Fort Myers, Florida, before noon. Transportation is starting to feel the effects, with road and port closures in effect.

Here’s the latest as of 11:30 a.m.: 

Roads

Interstate 75 is not closed. A spokeswoman for the Florida Department of Transportation said a map of the state’s traffic at the Florida 511 site can show a road as closed if there is no traffic on it, which appeared to be the case earlier. But later versions of the map did not appear to show those closures. Other videos on social media suggest the interstate remains open.

There are other road closures. For example, the Sunshine Skyway bridge over the southern end of Tampa Bay, which is a part of Interstate 275, is closed. Florida Gov. Ron DeSantis said several local bridges are closed because of wind danger.

Florida has suspended tolls on certain portions of Florida’s Turnpike, including around the Tampa area and central Florida near Orlando.

Ports/airports

In addition to the Tampa-area ports that were closed Tuesday, Orlando International Airport closed at 10:30 a.m. Wednesday. Tampa airport has left behind a team to assess runway conditions and clear hazards once the storm passes.

Port Miami’s two main container terminals were closed Wednesday. Seaboard Marine said it will only be open for landside operations. 

Port Canaveral is closed and has ceased all waterside and vessel shoreside port operations until further notice.  

Jaxport in Jacksonville, Florida, was slated to close at noon Wednesday. 

Ship-position data shows that container vessels in the queue off the Port of Savannah in Georgia are weighing anchor and heading out to sea. 

Rails

CSX and Norfolk Southern haven’t closed their rail terminals yet, but things could change as Hurricane Ian approaches.

In a detailed Tuesday update, CSX(NASDAQ: CSX) said it was securing rail assets and it noted that customer shipments are likely to be delayed until the storm passes. Operations at several CSX intermodal terminals, Transflo transloading terminals and TDSI auto handling terminals have also been suspended.

CSX’s Tuesday update detailed which terminals have suspended operations. They include terminals located in central Florida and nearby Tampa.

“Additional terminal closures may be necessary as the storm tracks northeast across Florida. Current forecasts predict tropical storm force winds and potential flooding over much of the state. CSX will continue to monitor storm conditions and provide timely notifications of service impacts and terminal closures as warranted,” CSX said.

Norfolk Southern (NYSE: NSC)said it is operating as scheduled, although high winds and heavy rains could impact rail operations later this week. The railroad said in its service advisory that it is positioning generators and equipment in advance of the storm, and it will provide updates as conditions change.

Fuel

President Joe Biden issued a warning to oil companies Wednesday morning. “To the oil and gas industry, do not — let me repeat — do not use this as an excuse to raise gasoline prices or gouge the American people.”

A wholesale diesel price in the heart of the hurricane’s path did show a significant increase from Tuesday into Wednesday, but it’s an amount that can be explained by movements in the futures markets. 

The final part of the supply chain where oil companies set the price is the wholesale level. Decisions about retail prices are in the hands of the individual station operators. The average wholesale diesel price from Tuesday into Wednesday in Tallahassee, Florida, per the ULSDR data series in SONAR, rose to $3.344 from $3.222, an increase of 12.2 cents per gallon. 

But wholesale prices track both spot market prices and futures prices, which in turn are highly correlated, and the ultra low sulfur diesel price on CME Tuesday rose 13.08 cents per gallon. So the increase in the wholesale price in Tallahassee was actually less than the increase in diesel futures prices. 

A quick check of some retail prices shows no change. Pilot Flying J, which makes available a spreadsheet of all its prices nationwide, was showing a diesel price of $4.999 per gallon both Tuesday and Wednesday in Ocala, Florida, and $4.649 per gallon in Fort Myers.

Source: FreightWaves

We continue to monitor the situation closely and will be in touch regarding any affected bookings. Should you have any questions, please don't hesitate to reach out.