Midwest flooding taking toll on freight transportation, shippers, and carriers

Staff -- Logistics Management, 6/16/2008

WALTHAM, Mass.—Recent flooding in the Midwest region of the United States that has taken its toll on freight transportation movements and operations in that part of the country, according to various media reports.

The Associated Press reported that as the flooding has caused rivers to overflow and submerged roads and rails, shipments of food, fuel, and other goods have been halted or delayed. And it added that the current situation has forced manufacturers to suspend production for various products, too.

The report noted that barge, rail, and road traffic may resume this week, but it is by no means definite.

Some examples of how freight transportation operations have been hindered include:

• Class I railroad carrier Union Pacific reporting it has six mainline tracks that carry freight through Iowa being out of service;
• Burlington Northern Santa Fe reporting delays on routes along the Mississippi River from Fort Madison, Iowa to Memphis; and
• Con-way Freight saying regional service has been shut down or delayed throughout flooded areas, although it expects service to be restored today as it is transferred to other routes.

Meanwhile, the AP said that both UPS and FedEx expected only minimal delays and said operations should return to normal this week if no further severe weather occurs.

An article in The Wall Street Journal said that the Midwest flooding will be particularly hard on the barge industry, with current conditions potentially costing the barge industry more than $1 million per day, according to Larry R. Daily, president of Alter Barge Line Inc. in Bettendorf, Iowa.

And Diana Klemme, a vice president with Atlanta-based Grain Service Corp., told the WSJ that rail disruptions will be long-lasting and more severe than barge disruptions, due to damage to bridges and other infrastructure.

The WSJ report also explained that these flooding disruptions are further complicating the current freight transportation and shipping landscape, which is already suffering from high gasoline prices, tight, capacity, and a declining dollar. It added that prices of consumer products are likely to rise further for things like consumer products of all kinds.