Supply Chain Matters Update Four- Effects of Hurricane Sandy on the U.S. Northeast
We pen this posting on the eve of the tenth day since the unprecedented hurricane and massive northeast storm impacted the northeast coastal region of the United States. The densely populated U.S. states of New Jersey and New York were directly in the storm path and suffered the most in many human and other dimensions. Today, an unusually early northeast snow storm impacted this same region with high winds and accumulated snowfall, causing additional coastal flooding and electrical power interruptions.
The headline pertaining to the multi-industry supply chain disruption continues to focus on continuing interruptions in petroleum, transportation and retail focused supply chains. Utility crews continue to work on restoring electrical power but progress has been frustratingly slow for those affected
In transportation, the ports of New York and New Jersey have opened for limited traffic but reports of damaged and flooded unloading and warehouse facilities, along with a lack of full electrical power continue. Some shipping channels shifted and new shoals have appeared. A report published in USA Today quotes an IHS Global Insight transportation services executive as estimating upwards of $1 billion in damages, a rate of $80 million per day.
Many inbound ocean containers have been re-routed to other U.S. east coast ports. A report posted on HamptonRoads.com indicates that 6000 containers were diverted to the Virginia port of Hampton Roads. Port officials indicated that 1400 of these containers have been shipped out on barges while the remainder wait to be dispositioned with alternative shipping arrangements. According to the report, the majority of the existing diverted containers are expected to be trucked back to the New York / New Jersey area. However, shortages of trailer carriers, drivers, and availability of fuel supplies in the New York area are expected to delay these movements.
As the days continue, availability of fuel supplies remains as issues as up to a third of available filling stations remain closed because of either a lack of power or fuel supply.
Railroad operator CSX has continued freight operations into the impacted areas but continues to indicate that conditions in the impacted regions continue to slow deliveries.
Reports published in The Wall Street Journal and the New York Times have begun to profile a number of small businesses that have been severely impacted just before the upcoming busy holiday buying period. Many were awaiting shipment of holiday focused goods while others suffered catastrophic physical damage. As expected, lower tired suppliers have begun calling their customers to inform them of inability to make supply commitments, and supply chain planning teams are now dealing with alternative plans to meet their end-customer fulfillment needs.