LOS ANGELES, Nov 5 (Reuters) - The temporary closure of
the sprawling United Parcel Service ( UPS ) 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, making it a crucial
part of 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 nine people, including three flight crew
members.
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.
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 about 0.5% at $93.76 in early 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.
The company's largest customers include the U.S. Postal
Service and Amazon.com ( AMZN ). UPS also delivers packages for
Walmart ( WMT ) and Target ( TGT ), manufacturers and many small
businesses.
Beyond that, more than 150 UPS customers, including major
pharmaceutical companies like Merck & Co ( MRK ), also have
inventory at Worldport.
UPS customers did not immediately comment on potential
delays.