Market Overview

Relentless Severe Storm Onslaught Disrupting Freight Movement

Relentless Severe Storm Onslaught Disrupting Freight Movement

Severe thunderstorms and tornadoes are simply a part of life in the Great Plains, especially in the springtime. But when they come day after day for almost a week, life can go from bad to worse, including in the transportation business.

What's Happened So Far

Since last Saturday, May 18, 2019, the Storm Prediction Center (SPC), a part of the National Weather Service (NWS), received 143 tornado reports, as well as several hundred reports of hail and wind damage. These reports were all from the same eight states – Arkansas, Illinois, Iowa, Kansas, Louisiana, Missouri, Oklahoma and Texas.

Truckers can have a tough enough time driving through garden variety thunderstorms, but when they become severe it's like throwing fuel into the fire. An unfortunate side effect of severe storms – besides wind, hail and tornadoes – is flash flooding. Flooded areas are often barricaded, forcing drivers to waste precious time finding alternate routes. It's always better to be safe than sorry – drivers should never try to go through areas of high water – but torrential rainfall can delay loads, and time is money.
Source: Union Pacific

Some loads end up on freight trains, but flooding has washed out many rails across the Great Plains and the Midwest in recent months, cutting off service to some areas and forcing rerouting. It's likely been taking longer to get loads onto barges with flooding and relentless storms along the Mississippi River. Assets such as the ports of St. Louis and South Louisiana, as well as several BNSF and Union Pacific rail lines have been compromised as a result of ongoing flooding that started in mid-March. It's been a very wet spring, and the recent parade of severe storms has made the flooding even worse, with new areas now underwater.

Officials with Union Pacific (NYSE: UNP), the second-largest railroad in the U.S., said the following in a customer letter on May 20:

"Very heavy rainfall and a subsequent washout have caused a derailment on the Palestine Subdivision resulting in a service outage between Palestine and Elkhart, Texas. While crews are working diligently to restore service, soft ground conditions may delay the site recovery process. Customers with shipments moving through the affected area may experience delays between 24 and 36 hours."

This was followed by another statement the next day:

"Heavy rainfall and flash flooding are impacting operations in our Southern Region, including washouts and water over the rails in several Oklahoma locations. As heavy rainfall is expected to continue, we will monitor track conditions for washouts in nearby states as well, including Arkansas, Kansas and Missouri. We have positioned resources to react quickly to any additional service interruptions these weather conditions may cause. Due to these weather events, customers with shipments moving through the affected areas may experience delays between 48 and 72 hours."

SONAR Critical Events: Assets (outlined in red) at risk from flooding in St. Louis area, May 23, 2019.

BNSF, owned by Berkshire-Hathaway, also has several rail lines that are out of service due to flooding. These include portions of the following subdivisions: Douglass, Hannibal, Napier, River, and most recently Cherokee.

The Damage Done

Tweet from May 23, 2019.

One of the hardest-hit areas from this week's storms was Jefferson City, the capital of Missouri. The city of around 43,000 people was hit by a likely tornado just before midnight on Wednesday night, May 22. Damage was extensive, with people trapped in basements and under rubble. The NWS is surveying the area to confirm that the damage was done by a tornado instead of straight-line winds. The Missouri Department of Public Safety tweeted that three people were killed in the Golden City area of Barton County, and several were injured in the Carl Junction area of Jasper County.

Other deaths from this week's storms include a 74-year-old woman found early Wednesday morning in Iowa. Officials there say she was killed by a possible tornado that damaged a farmstead in Adair County. Missouri authorities said heavy rain was a contributing factor in the deaths of two people in a traffic accident Tuesday near Springfield. A weather-related death may have occurred in Oklahoma; Oklahoma Highway Patrol officials said a woman apparently drowned in floodwaters on Tuesday, May 21 after driving around a barricade near Perkins, about 45 miles northeast of Oklahoma City.

Also in Oklahoma, homes were washed away by raging flood waters along the Cimarron River, and barges broke loose on the Arkansas River.

The Outlook

SONAR Critical Events: Severe Thunderstorm/Tornado risk areas for May 23, 24 and 25 shaded in yellow and orange.

Severe thunderstorms will likely develop across the same regions for at least a few more days. The NWS is forecasting some locations on the Arkansas River in Oklahoma and Arkansas to remain at major flood stage through the busy Memorial Day weekend, or to reach major flood stage by the weekend.

Image sourced from Pixabay

Posted-In: Freight Freightwaves Logistics Supply Chain weatherNews Markets General


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