August 30, 2005
Democrat-Gazette Press Services
While much of the country‚s business community was focused Monday on Hurricane Katrina‚s effect on energy production and prices, rail companies, insurers and others had storm-related problems of their own.
Union Pacific Corp. and other freight railroads halted New Orleans-area service and rerouted trains to avoid Hurricane Katrina, delaying thousands of shipments.
Union Pacific, the biggest U.S. railroad, pulled back trains and shifted some service through Memphis, spokesman Mark Davis said. CSX Corp., another major freight hauler, halted service on 246 miles of track east of New Orleans, and Burlington Northern Santa Fe Corp. and Norfolk Southern Corp. parked or rerouted trains.
The railroads weren‚t able to say when they expect to resume service. Katrina made its landfall Monday east of New Orleans, where the five biggest North American railroads deliver and exchange shipments such as chemicals.
"We‚ll wait for the storm to come ashore, and then assess the damage that might have been done," said Patrick Hiatte, a spokesman for Fort Worth-based Burlington Northern. The company hoped to do an aerial inspection today to help decide when to resume service, he said.
Other business-related effects from Katrina:
After storm modelers said Monday that Katrina could cost insurers as much as $26 billion ˜ compared with $22.9 billion for all four Florida hurricanes in 2004 ˜ a number of insurance stocks dropped.
Shares of St. Paul Travelers fell 47 cents to $44.27 on the New York Stock Exchange. Allstate shares fell 77 cents, or 1.4 percent, to $57.18. Shares of Hartford Financial Services Group Inc., a property and casualty insurer, slipped $1.08 to $73.63.
Among publicly traded U.S. insurers, Allstate has the biggest market share in the affected areas at 15.7 percent, according to Banc of America Securities analyst Brian Meredith. St. Paul Travelers has the second-largest at 6.9 percent.
BASF AG, Dow Chemical Co. and at least four other chemical makers cut production at Gulf Coast plants Monday. BASF shut all 15 of its plants in Geismar, La., its largest U.S. site, spokesman Don McGrath said. Dow stopped making polyethylene and ethylene glycol in St. Charles, La., spokesman Chris Huntley said. Westlake Chemical Corp., Georgia Gulf Corp. and Wellman Inc. also closed plants.
Corn and soybean prices in Chicago rose on speculation that Katrina will damage fields from Louisiana to Ohio, reducing supplies of the two biggest U.S. crops.
Bunge Ltd., meanwhile, evacuated workers at a soybean plant in Destrehan, La.
Katrina "is likely to disrupt global grain trade, but the degree is unclear," Credit Suisse First Boston analyst David Nelson wrote Monday in a report to investors, noting that much of the country‚s farm exports travel down the Mississippi River and into the Gulf of Mexico.
Wal-Mart Stores Inc. said it had closed 80 stores because of the storm, while Home Depot Inc. and Lowe‚s Cos. said that they had closed more than 20 stores between them from Louisiana to Florida because of the hurricane.
Nissan Motor Co. canceled shifts at its Canton, Miss., plant. Workers were sent home late Monday morning, while Nissan canceled an afternoon maintenance shift and its night shift, spokesman Vicki Smith said. Nissan will lose production of about 1,000 vehicles, she said.
Shares of oil-service companies rose Monday on speculation the companies will benefit from orders for rig and pipeline repairs.
Shares of Halliburton Co., the world‚s largest oilfield-services company, rose 54 cents to $57.80 on the New York Stock Exchange. Shares of Cal Dive International Inc., which does undersea construction and maintenance, jumped $3.02 to $56.17. Information for this article was contributed by Rip Watson, Alan Ohnsman, Jack Kaskey, Daniel J. Goldstein and Dan Lonkevich, all of Bloomberg News, and by Dow Jones Newswires.
This story was published Tuesday, August 30, 2
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