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Hurricanes: A Storm in Global Supply Chains

From financial services to supply chain and logistics, the COVID-19 pandemic has impacted almost every global industry. The effects of retail shortages, scarcity of materials, and manufacturing delays are still rippling down supply chains, overwhelming those in the industry. Given these already existing strains, severe weather can cause even further congestion and lasting impacts on global supply chain systems.   

Hurricanes in particular have the potential to severely congest supply chains. The National Oceanic and Atmospheric Administration (NOAA) had predicted a 60% chance of an above-average hurricane season in 2021, and we are already seeing a tangle in the supply chain as a direct result of Hurricane Ida in the United States. According to the Federal Emergency Management Association (FEMA), there are currently 1,571+ trucks on the ground from over 250 transportation companies to help with Ida relief efforts. This includes 3PLs, asset-based carriers, and brokers. As trucks help with Ida relief, freight piles up in warehouses, and more freight to transport means higher truckload spot rates.  

The pressing need for fuel is common after severe hurricanes, and unfortunately, this product shortage has hit New Orleans, Louisiana hard. Louisiana’s refineries contribute to almost one-fifth of the United States’ crude-processing capacity, and several plants were shut down on Sunday, August 29th as Hurricane Ida hit the state. President Joe Biden visited Louisiana this past week to review recovery needs and help bring fuel to the area. In the interim, Exxon Mobile Corp. has supplied over 230,000 barrels of fuel the last nine days, but that’s not nearly enough when compared to the 3.4 million barrels a day the state is capable of producing from the global supply chain. Other states must give up their fuel to aid with Ida relief, leaving lasting impacts on the supply across the nation due to distribution shortages across the globe.  

Infrastructure impacts are one of the most drastic effects impacting supply chains. Flooded or otherwise closed roadways, bridges, and overpasses delay freight, rail, and even air cargo. These delays contribute to backups in the supply chain and also contribute to short-term product shortages. Items such as building materials sky-rocket in demand, but supply and delivery can’t keep up. Unfortunately, organized cargo thieves are quick to adapt to product shortages and aggressively target carriers to steal these materials. Law enforcement is already stretched thin, giving these thieves a higher likelihood of getting away with their crimes.   

All it takes is one severe hurricane to have a lasting impact on the supply chain. No industry is safe from these impacts, whether fuel, raw materials, or even food and beverage. It’s important to ensure the visibility, security, and integrity of your cargo, as well as proactively manage these risks in real-time so that your organization can find ways to operate around even the biggest storm. Overhaul’s Intelligence and Response team is here to supply your organization with severe weather and theft intel that puts you in control of your supply chain, even when hurricanes hit.    

Overhaul’s Intelligence and Response Team is committed to bringing you the most up-to-date information on global supply chain risks and disruptions. To stay apprised of the latest news, subscribe to the Supply Chain Intelligence and Response LinkedIn Group. 

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