As we pen this posting, Hurricane Sandy has been churning up the U.S. east coast and is forecasted to combine with another winter storm and Jetstream forces in a significant storm with major destructive implications. The storm is expected to turn westward and make a direct strike on one of the heaviest populated areas of the U.S., namely the New Jersey and New York regions. The effects of this storm in terms of hurricane force winds and very heavy rains are extend to over 500 miles from the center of this storm. Weather forecasters have termed this storm to be one of “historic proportions” especially for certain portions of the U.S. northeast, with impacts throughout the Mid-Atlantic region including New England. Widespread and long-duration electrical power interruptions are further forecasted.  Some forecasters are already speculating upwards of $15-$20 billion in expected economic damage.

No doubt, supply chains in the northeast and perhaps the rest of the U.S. will be considerably impacted. There are 5 east coast oil refineries directly in the forecasted strike zone along with petrochemical and pharmaceutical production facilities.  The Mid-Atlantic and Northeast regions are also the epicenter for the seafood, poultry and other food related production supply chains. Already, transportation has been severely curtailed with airlines, rail lines, ports and other carriers suspending services until after the storm.  New York City alone is expected to experience storm surges and flooding that it hasn’t seen in the past 100 years with dire warnings that the entire subway system could be flooded.  Subway services were shut down last night. There is serious concern for the two airports located adjacent to New York City since they lie near the water where high storm surge is expected. Equity markets and the New York Stock Exchange will suspend operations out a sense of caution. The storm is forecasted to move inland and meander for additional days, adding more concern for prolonged flooding and economic impact.

Supply Chain Matters will continue to monitor this ongoing situation in terms of supply chain implications.  Readers should also be aware that both our offices and ISP provider reside in the impacted region and that we may experience some interruption in posting activity during the coming days.