By Lisa Baertlein
LOS ANGELES (Reuters) -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, 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. UPS also delivers packages for Walmart and Target, manufacturers and many small businesses.
Beyond that, more than 150 UPS customers, including major pharmaceutical companies like Merck & Co, also have inventory at Worldport.
UPS customers did not immediately comment on potential delays.
(Reporting by Lisa Baertlein in Los Angeles and Lisa Barrington in Seoul; Editing by Paul Simao)
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