Is there anyway in terdata where we can setup alerts if there is blocking? I know there is Alert Policies, but looks like it does not let us send an e-mail to user.
You can easily send email to users through viewpoint in case there is a blocking.
Admin -> Alert Policies -> Delivery Settings -> Email (Specify your SMTP host here)
Specify action sets or action sets groups as required.
Admin -> Teradata Systems -> (Your SYSTEM) -> Alerts -> Session -> (Configure blocking alert here)
Yes, pretty much the same concept with Teradata Manager as well, please refer to the TD Manager documentation. It's explained pretty neatly in there.