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. Given these already existing strains, severe weather events can cause even further congestion and lasting impacts on global supply chain systems. This is especially true for your supply chain during hurricane season.
Hurricanes have the potential to severely congest supply chains. Unfortunately, the National Oceanic and Atmospheric Administration (NOAA) predicted a 60% chance of an above average hurricane season in 2021. And today, the Hurricane Ida supply chain disruption is wreaking havoc across the United States.
According to the Federal Emergency Management Association (FEMA), over 1,571 trucks from over 250 transportation companies are helping with 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.
Already calamitous, this is only the start of how hurricanes affect supply chains.
Business supply chains during hurricane season
High winds and heavy rains are cause for concern, often leading to delays. Trucking companies might need to find alternative routes or completely stop a shipment. Delays like this don’t just mean a late arrival — they could prevent goods from arriving, period.
Cargo thieves are eager to take advantage of tense situations, and few events are more intense than a hurricane. If a truck is forced to stop and stay in place for an extended period, it becomes a sitting duck.
In addition to the above, delays due to hurricanes can cause ripple effects, such as stagnated recovery efforts and limited resources.
The pressing need for fuel is common after severe hurricanes. Unfortunately, this product shortage has hit New Orleans, Louisiana hard. Louisiana’s refineries contribute nearly one-fifth of the United States’ crude-processing capacity. But on Sunday, August 29th several plants were shut down 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. However, that’s not nearly enough when compared to the 3.4 million barrels a day the state is capable of producing.
Other states will need to give up their fuel to aid with Ida relief. However, this will lead to lasting impacts on the supply across the nation due to distribution shortages across the globe.
Problems with infrastructure are another issue faced by supply chains during hurricane season. 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.
How can supply chains prepare for hurricane season?
Hurricane Ida is just the newest in a long line of destructive hurricanes, including Hurricane Ian. No industry is safe from these storms, whether fuel, raw materials, or even food and beverage.
Supply chain management means being prepared, no matter the circumstances. Rather than try to recover once the weather subsides, it’s best to prepare your supply chain for hurricane season in advance. And with the right supply chain partner, you can proactively prepare for natural disasters and manage risks in real-time.
Overhaul’s Intelligence and Response team is here to supply your organization with severe weather and theft intel. Our technology puts you in control of your supply chain when hurricanes hit and is a must for any emergency plan.
Knowing how to protect your supply chain during hurricane season is only one factor in supply chain risk management. Learn more about how you can make the roads safer by strengthening your incentive programs for motor carriers.