The Supply Chain Matters blog features a commentary on the aftermath of Hurricane Ian that impacted the United States and the impacts for industry supply chains.
By now, readers may have already visualized and read of the devastating impacts that Hurricane Ian delivered as it inflicted a path of destruction and historic flooding across a wide area of Northern Florida, as well as the Carolina’s. This storm had previously brought destruction and severe flooding among Caribbean regions to include Puerto Rico, Cuba, and other island nations, and rapidly grew to be a Category Four hurricane as it crossed the warm waters of the Gulf of Mexico.
After crossing the State of Florida, depositing a reported 10 to in excess of 20 inches of rainfall to some areas, the storm reformed as a Category One force and made another landfall in coastal South Carolina bringing high winds and flooding to the Carolina’s and other states.
As we pen this Supply Chain Matters commentary, estimates are that this storm may well be noted to be one of the strongest storms to impact the U.S. with initial damage estimates ranging from $65 billion to $100 billion.
Four days since the hurricane made its initial landfall in Northwest Florida with sustained winds in excess of 150 miles per hour, search and rescue efforts continue utilizing airborne, water and ground assets. Images that permeate national media channels reinforce the storm has created wide areas of infrastructure, housing and other destruction that will require weeks, months and even years to restore to some semblance of normal. Some cities, towns or beachfronts will never be the same.
Thus far the confirmed death toll exceeds 70 but is expected to be far higher when recovery operations get into full swing. President Joe Biden has vowed to bring the full support of the U.S. Federal Emergency Response Agency (FEMA) and the U.S. Federal Government itself in recovery and repair efforts. Estimates are emerging that it could take months and years for all of the rebuilding to occur.
The industry supply chain implications reflect on a number of dimensions.
As always, logistics and transportation teams are already marshalling fuel and transportation resources to move essential food, healthcare and other goods to the impacted areas. Impacted populations will continue to require food, healthcare and temporary housing assistance. Ports, rail lines or storage facilities that may have incurred damage will be tended to. Major home improvement and general merchandise retailers have always responded immediately when emergency needs are evident, and FEMA has enormous emergency supply chain capabilities that can and will be leveraged.
The reconstruction needs for building, road, and construction materials, electrical and telecommunications infrastructure and household goods are immense, but supply chain teams will eventually plan and manage these supply needs. Supplier lead times will increasingly be a challenge as inflation and increasing signs of economic recession take an added toll on resources.
The more sobering aspects of these events are the increasing and more visible effects of severe climate change in the notions of more catastrophic storms, wildfires and natural disasters. Climate scientists warn that disasters amounting to $1 billion plus in damages continue to increase in frequency and severity.
Climate change and added geo-political tensions and risks collectively compel a broader an urgent dimension to overall business continuity needs including tenets of supply chain agility, risk mitigation and supply network resiliency.
From our lens, businesses and their supply chain teams have little choice but to aggressively move forward with sustainability strategies and actions in multiple dimensions. Materials sourcing decisions need to be weighted for sustainability, carbon costs, supply risk and resiliency criteria, as opposed to just costs alone. Transportation and logistics services providers should be allocating budgets as well as increased fuel surcharges toward alternative fuel and services investment and service options.
Business profits that are increasingly funneled to stock buybacks, added dividends or increased executive bonus structures should be equally weighted toward investments in business and supply chain sustainability investments.
These are indeed the new table stakes of business, along with our responsibilities for the generations to come. These are not the notions of science fiction and we all need to seriously heed the warnings of climate scientists on the risks of global warming.
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