The temporary closure of the sprawling United Parcel Service air cargo hub in Louisville, Kentucky, following a deadly plane crash will create delays through the delivery firm's global network.
The Worldport hub processes millions of packages for roughly 360 incoming and outbound aircraft each day, giving it a critical role in the UPS air cargo operation's hub-and-spoke model.
The company stopped operations there on Tuesday night after a UPS cargo plane crashed at Louisville International Airport, killing at least 12 people, including three flight crew members, according to local officials.
UPS on Wednesday canceled the mid-morning to mid-afternoon Worldport shift that handles Second Day Air packages. It has not said when it plans to resume regular operations at the 5.2-million-square-foot (483,096-square-meter) facility that is roughly the size of 89 U.S. football fields and can process 416,000 packages per hour.
In a service alert on Tuesday, UPS said scheduled delivery times for air and international packages may be affected and that it had contingency plans in place to help limit disruption. Customer alerts seen by Reuters on Wednesday showed packages stalled at UPS regional hubs like Ontario, California, and Rockford, Illinois.
Because many UPS packages pass through Worldport on their way to other destinations, there will be inevitable delays and disruptions for UPS customers, said Niall van de Wouw, chief airfreight officer at transportation pricing platform Xeneta.
"For every day of closure, it could take several days for air cargo to recover, especially as we are now heading towards year-end peak season," he said, referring to the upcoming winter holiday rush for air cargo shipments.
He said he expected limited impact on wider air cargo services and freight rates.
UPS shares were up 0.2% at $93.44 in afternoon trading.
The UPS delays will be far-reaching since its customers for both delivery and return services include a broad swath of U.S. businesses and agencies.
UPS since September 2024 has been the No. 1 air cargo service provider for the U.S. Postal Service, transporting Priority and other speedy mail products.
The USPS is working closely with UPS to assess the duration of the impact of volume moving under the contract, a postal service spokesperson said.
Amazon.com is the largest customer at UPS, which also delivers parcels for Walmart and Target, as well as for manufacturers and businesses.
Beyond that, more than 150 UPS customers, including major pharmaceutical companies like Merck & Co, also have inventory at Worldport.
UPS customers mentioned above did not immediately comment on potential delays.
Florida-based contact lens seller ABB Optical Group on Wednesday said it warned customers on the social media site X that some of its shipments could be delayed due to the UPS accident "out of an abundance of caution and transparency."
The delivery firm can divert some packages bound for Worldport to other regional and international hubs, said Satish Jindel, founder of shipping consultancy ShipMatrix.
FlightAware showed UPS planes flying between U.S. hubs in what appeared to be an effort to bypass Worldport. There were Honolulu and Philadelphia flights to Ontario, while flights from Ontario were destined for Boston, Dallas-Fort Worth and Philadelphia.
UPS has a large international operation with customs capabilities in Philadelphia, Jindel said. FlightAware showed UPS planes flying from that airport to Cologne, Paris and the UK.
Those workarounds will likely slow packages, Jindel said.
"Facilities were never designed to replace Louisville," Jindel said.
The Worldport hub processes millions of packages for roughly 360 incoming and outbound aircraft each day, giving it a critical role in the UPS air cargo operation's hub-and-spoke model.
The company stopped operations there on Tuesday night after a UPS cargo plane crashed at Louisville International Airport, killing at least 12 people, including three flight crew members, according to local officials.
UPS on Wednesday canceled the mid-morning to mid-afternoon Worldport shift that handles Second Day Air packages. It has not said when it plans to resume regular operations at the 5.2-million-square-foot (483,096-square-meter) facility that is roughly the size of 89 U.S. football fields and can process 416,000 packages per hour.
In a service alert on Tuesday, UPS said scheduled delivery times for air and international packages may be affected and that it had contingency plans in place to help limit disruption. Customer alerts seen by Reuters on Wednesday showed packages stalled at UPS regional hubs like Ontario, California, and Rockford, Illinois.
Because many UPS packages pass through Worldport on their way to other destinations, there will be inevitable delays and disruptions for UPS customers, said Niall van de Wouw, chief airfreight officer at transportation pricing platform Xeneta.
"For every day of closure, it could take several days for air cargo to recover, especially as we are now heading towards year-end peak season," he said, referring to the upcoming winter holiday rush for air cargo shipments.
He said he expected limited impact on wider air cargo services and freight rates.
UPS shares were up 0.2% at $93.44 in afternoon trading.
The UPS delays will be far-reaching since its customers for both delivery and return services include a broad swath of U.S. businesses and agencies.
UPS since September 2024 has been the No. 1 air cargo service provider for the U.S. Postal Service, transporting Priority and other speedy mail products.
The USPS is working closely with UPS to assess the duration of the impact of volume moving under the contract, a postal service spokesperson said.
Amazon.com is the largest customer at UPS, which also delivers parcels for Walmart and Target, as well as for manufacturers and businesses.
Beyond that, more than 150 UPS customers, including major pharmaceutical companies like Merck & Co, also have inventory at Worldport.
UPS customers mentioned above did not immediately comment on potential delays.
Florida-based contact lens seller ABB Optical Group on Wednesday said it warned customers on the social media site X that some of its shipments could be delayed due to the UPS accident "out of an abundance of caution and transparency."
The delivery firm can divert some packages bound for Worldport to other regional and international hubs, said Satish Jindel, founder of shipping consultancy ShipMatrix.
FlightAware showed UPS planes flying between U.S. hubs in what appeared to be an effort to bypass Worldport. There were Honolulu and Philadelphia flights to Ontario, while flights from Ontario were destined for Boston, Dallas-Fort Worth and Philadelphia.
UPS has a large international operation with customs capabilities in Philadelphia, Jindel said. FlightAware showed UPS planes flying from that airport to Cologne, Paris and the UK.
Those workarounds will likely slow packages, Jindel said.
"Facilities were never designed to replace Louisville," Jindel said.
