In a joint statement delivered by New Jersey Republican Governmor Chris Christie and Democratic New York Governor Andrew Cuomo, the leaders stated their appreciation of the passage of a $50.5 billion Hurricane Sandy recovery aid package in the House of Representatives.
“The tradition of Congress of being there and providing support for Americans in times of crisis, no matter where they live across this great country, lives on in today’s vote in the House of Representatives.”
The legislation allocating the funds will now have to go to the Democratic- controlled Senate, where it is sure to pass through quickly.
Republicans in the House did not move to pass the aid package as quickly as they could, debating on the effects of such a large allotment of funds on US debt reduction, spending and taxes.
Sandy’s power is extending beyond the immediate time and place her winds blew and waters surged as businesses see delays hindering their ability to get merchandise into stores in time for the holiday shopping season.
The superstorm not only closed down shipping terminals and covered warehouses with floor to ceiling water. Deliveries were also hindered by fallen power lines, blocked and closed roads, and severe gasoline shortages in New Jersey and New York.
At any other time of year this would be seen as a serious hinderance to business, but now, just as retailers usually begin to prepare for the frenetic shopping of the Christmas holiday season such a backup or cancellation of orders can spell complete disaster. For many merchants the holidays are when the bulk of their business is contracted.
“Things are slowing down,” said Chris Merritt, vice president for retail supply chain solutions at the trucking company Ryder. “This whole part of the supply chain is clogged up.”
Several examples include:
• FedEx has rented fuel tankers to insure that its delivery trucks have a steady supply of fuel in the face of commercial stations running dry.
• Ryder has been looking for trucks to rent to add capacity.
• The major railroad company CSX has been advising their customers to expect delays at least 72 hours long on their shipments.
• Retailers such as Amazon and Diane von Furstenberg informed customers to expect shipping delays.
Economic analysts are predicting that the storm will reduce economic growth by as much as a half of a percentage point in the last quarter of 2012. This is a large decrease considering the entire economic growth for all of 2012 was expected to be only about 1-2 percent.
Direct losses from Sandy are going to be much less than the losses caused by Hurricane Katrina in 2005, but the impact of Sandy may well be greater in its aftermath due to the dense population in the Northeastern states where Sandy let lose her destructive forces.
The Northeastern US is responsible for about $3 trillion in output, which is about 20 percent of the nation’s total gross domestic product.
“Part of what was lost will be delayed, but part is lost forever,” said Gregory Daco a senior economist with IHS Global Insight.
Wall Street hunkered down on Monday and Tuesday as Hurricane Sandy blew through the region, leaving unprecedented destruction in her wake. But with minimal damage on the prestigious New York Stock Exchange trading floor and hours of preparation and testing of electronic communications systems, the exchange is going to open normally at 9:30am on Wednesday morning.
Peter Anderson, a senior portfolio manager at the Boston-based Congress Asset Management firm said,
“There will be no Halloween costumes on the New York Stock Exchange when the market opens back up because there will be a great deal of tension just in terms of restarting the markets and making sure … trading goes smoothly.”
The forecasting company IHS Global Insight is predicting damage from Sandy could amount to as much as $50 billion. In contrast last year’s hurricane/tropical storm Irene was the cause of $4.3 billion in insured damage.
IHS is saying that property damage could reach about $20 billion and lost business revenue may amount to $30 billion. Together the losses could reduce US overall economic growth by 0.6 percentage points in the last quarter of 2012. Retailers, airlines and home construction firms will most likely be hit hard.
US-based airlines were forced to cancel over 7,000 scheduled flights in to and out of the Northeast corridor on Sunday.
Flight cancellations began in the region from Washington D.C. to Boston as early as Sunday evening as states and municipalities began to make preparations for what some are predicting will be the largest storm to ever make landfall in the United States.
Flooding is expected, along with hurricane force winds. In some areas further north snow will also be a factor. In New York City flights were cancelled according to the timing imposed by the city’s shutting down of mass transportation at 7pm on Sunday. By 9pm all flights in and out of NY were cancelled. Fees for changing travel plans due to the cancellations were waived by the airlines.
U.S. Airways says it will be forced to cancel at least 2,000 flights, from Sunday at 7pm until sometime on Tuesday. The spokesman added that delays could be extended depending on the duration and strength of the storm and the damage it might cause. Planes on the ground will be repositioned away from the Hurricane’s path to avoid damage to them, which will cause additional delays.
George Hamlin, transportation consultant predicted that Sandy will cost the airline industry hundreds of millions of dollars. Not only will the airlines lose flight revenue, but they will probably have to pay their crews extra if they are stranded away from their home bases.
