*

Closure of critical UPS Worldport air cargo hub affects

delivery

firm's global network operations

*

Service disruption is due to Tuesday's UPS cargo plane

crash in

Louisville, Kentucky

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Major UPS clients like US Postal Service, Amazon ( AMZN ), Walmart ( WMT )

face

potential delays

*

FlightAware data shows UPS planes moving between regional

hubs,

bypassing Worldport

(Adds USPS comment in paragraph 12; UPS customer comment in

paragraph 16)

By Lisa Baertlein

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, 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 ( AMZN ) is the largest customer at UPS, which

also delivers parcels for Walmart ( WMT ) and Target ( TGT ), as

well as for manufacturers and businesses.

Beyond that, more than 150 UPS customers, including major

pharmaceutical companies like Merck & Co ( MRK ), 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.