In the meantime, detours around damaged railroad tracks are likely to continue to delay rail shipments. Union Pacific, one of the country’s largest cargo rail carri ers, was detouring through Memphis and St. Louis 14 trains that normally use the New Orleans gateway. Norfolk Southern, another major rail carrier, operated its first westbound train from New Orleans Sept. 13 and gave it to Union Pacific at Avondale, LA, just west of the Mississippi River. Several Norfolk Southern buildings in New Orleans were also severely damaged in the storm. CSX Corp. anticipates losses of $250 million in storm damage and business inter ruptions. It has had to reroute many trains as track and infrastructure repairs, which could take up to six months to complete, are made.
Logistics in general throughout the area also took another big hit in the form of facilities damaged by the storm. Many public refrigerated warehouse facilities “located in New Orleans in particular, have been most seriously affected,” reports Bill Hudson, president of the Alexandria, VA-based International Association of Refrigerated Warehouses (IARW). “Some facilities were literally opened up by Katrina; others were casualties of flooding; and all suffered from at least a loss of power.”
Adds Bob Shaunnessy, executive director of the Warehousing Education and Research Council (WERC), based in Oak Brook, IL, “A good number of the public warehouses, wholesalers and distributors who shut their doors for the storm are just now cranking operations back up.” For them, it has been a constant struggle to find enough dry ice to prevent further product damage without the benefit of electricity. Many have had to seek out warehousing options elsewhere.
Flower Foods, Thomasville, GA, is one such firm. It saw significant damage to 10 of its 24 bakery warehouses in the area. Those facilities are unable to operate, forcing the company to reopen a shuttered facility in Houston to serve customers in Louisiana, Mississippi and Alabama. The company is also diverting many shipments to and from other facilities in Lafayette, LA, Baton Rouge and elsewhere.
“We will continue to serve the market, but we anticipate the cost of doing so will be extremely high,” says Flower Foods President and CEO George Deese. “There will be costs associated with re-opening the closed bakery in Houston as well as extra shipping and handling costs to transport the product to the Louisiana market. However, this temporary solution will allow us to con tinue service to the territories in Louisiana, Mississippi and southwest Alabama to which we can gain access.”