The disruption caused by the I-95 section collapse in Philadelphia could have widespread implications, say logistics experts.
Several lanes of I-95, a key highway that stretches from Miami to Maine, collapsed Sunday after a tanker truck caught fire underneath the overpass. A body was recovered from the wreckage on Monday.
The collapse has resulted in the closure of a stretch of the highway, which carries on average 160,000 vehicles per day, around 8% of which are trucks.
Anthony Thrasher, senior director of product management at retail supply chain software company SPS Commerce, told MarketWatch that disruptions could impact major retailers at an important time of the year. “We’re starting to get into the busy season, with retailers starting to make purchases for the holiday season,” he said. “June/July, it starts really heating up, they are making their big wholesale purchases for the holiday season.”
Matt Anderson, vice president of the Logistics as a Service department at supply-chain specialist e2open, told MarketWatch that the I-95 collapse could have widespread implications for the transportation industry. These include a cost impact due to “out-of-route” miles and additional fuel costs, as well as shipping and delivery disruptions as itineraries are impacted.
Related: After Philadelphia I-95 collapse, Buttigieg weighs supply chain, economic impact: ‘That is a lot of America’s GDP moving along that road’
“Shorter-haul movements may be impacted more as room for error is much less,” Anderson added, also pointing to potential “drayage” impact due to the disaster’s proximity to the Port of Philadelphia. Drayage refers to freight movements to and from an ocean port, which are typically short-haul journeys.
The I-95 collapse may affect some travel to and from Port of Philadelphia terminals, specifically its Tioga Marine Terminal, PhilaPort tweeted Monday. “At this time, detours appear to be working effectively,” it added.
Detour routes are in place following the I-95 section collapse, according to the Pennsylvania Department of Transportation.
On-time delivery performance could also be impacted as a result of shipping locations becoming backed up with late arrivals and possible delays due to route changes, according to Anderson. “If early reports lead to significant disruptions, this could lead to upward pressure on freight rates and/or tender acceptance issues if drivers avoid the area,” he told MarketWatch. A tender is an offering of a freight movement to a carrier. Tender acceptance is the process where the carrier agrees to haul the freight for a specified price.
Related: I-95 collapse may snarl traffic for months. But a media legend was born.
Speaking during a press conference at the collapse site Monday, Transportation Secretary Pete Buttigieg acknowledged that the disaster could push prices for goods up. “It’s one of many, many factors that can affect the cost of shipping, but, here on the East Coast, there’s no question that the effect will be upward pressure until it can be completely resolved,” he said.
Buttigieg said officials are looking for help from Alphabet Inc.’s
GOOGL,
GOOG,
Google and Israeli-based mapping and navigations group Waze Inc., which Google acquired in 2013. “There’s going to be a lot of work, analysis and support going into making sure that we make the most of alternative routes,” he said. “We’re even making contact with Google and Waze to try to optimize any kind of software information that is reaching drivers, whether it’s commuters, travelers or truckers.”
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