Critical weather strategies for your supply chain
Unpredictable and damaging weather patterns threaten to disrupt global supply chains every season. Reports of Climate.gov show that rising temperatures have increased the frequency and severity of extreme weather events. Over the past 20 years, there have been 7,348 major natural disasters around the world, resulting in 1.23 million deaths and $2.97 trillion in global economic losses. Erratic weather patterns have resulted in intense heat waves, droughts, snowstorms and wildfires that have strained current infrastructure beyond what resources can support.
The global economy is supported by supply chains that are at the mercy of complex weather systems. Whatever the forecast, it’s important that shippers and consumers adjust their expectations to match what has become an unpredictable freight cycle, often with inevitable disruptions at every link in the supply chain. Many do not understand the effect of weather conditions on inventory availability and shipment status, particularly if they are not directly confronted with adverse weather conditions. Shippers and carriers should establish a weather-related action plan that can compensate for unforeseen delays and help keep parties informed quickly in anticipation of a catastrophic event.
Protecting against supply chain disruptions through critical weather strategies has proven effective in reducing delays and costly overruns. Because blizzards, floods, tornadoes and hurricanes are more common today than ever, it is inevitable that your business will be affected, directly or indirectly, at some point. Such disruptions come with workforce reductions, tighter capacities, fewer logistical options, increased risks and increased costs.
Shippers should consider developing a critical weather supply chain strategy that includes:
- Ensure the rapid replenishment of stocks wherever and whenever possible;
- Develop a weather-related routing guide that provides deeper access to local capacity and suppliers;
- Develop relationships with FEMA-related third-party logistics providers and carriers;
- Select 3PLs and carriers based on their ability to adapt to severe weather and natural disasters, and understand their strategy;
- Increase open and advanced communications between organizations; and
- Integrate weather disruptions and disasters into overall business continuity planning.
Hurricanes are among the greatest natural threats to the global supply chain. A recent and later study article published in the journal Scientists progress and highlighted on CNN showed that even though the United States and Europe have worked for decades to reduce air pollution, scientists have discovered an unintended and difficult consequence: an increase in tropical storms in some regions. There is a global change in the distribution of tropical cyclones that is felt in the movement of materials and goods that impact each continent.
Hurricanes affect all kinds of goods, including essential goods entering an affected area, as well as regular items leaving the disaster area. In this case, capacity will disappear for at least two to four weeks to make way for hurricane-related cargo. Outside of the disaster areas, capacity will likely decrease, meaning shippers won’t be able to transport as much product. Therein lies the fragility of our supply chain: it becomes overloaded when capacity is knocked out of the normal freight cycle, leaving shippers unaffected who need outbound freight and associated reloads.
Third-party logistics providers can help you find capacity through full, LTL, refrigerated, flatbed, and local or regional carriers. Carriers have choices about how they might get involved in hurricane and disaster relief efforts. The most common are the use of drop trailers, power sources and drivers, all of which are removed from the normal market. Shippers should be aware of which carriers or 3PLs are FEMA-certified, as that capacity will likely be out of the market when moving goods to affected areas.
For carriers, product seasonality is predictable, but natural disasters are not. In reality, Stanford University argues that climate change could shift the limits of weather predictability and make reliable 10-day forecasts out of reach. Either way, carriers have become much more aware of extreme weather conditions and are adjusting service and pricing communications with shippers.
Carriers can take the following actions to guide emergency weather programs:
- Set up a “weather watch” awareness protocol;
- Develop a proactive and prescriptive strategy that meets customer needs;
- Clearly communicate objectives to customers and employees;
- Advise customers to start inventory replenishment early and stock up before hurricane season, be part of their continuity plans and ask them not to rely solely on your organization for capacity;
- Keep drivers safe and moving to help ensure their personal and physical safety; and
- Take advantage of reverse logistics opportunities, which provide another source of income.
Weather events happen whether you are prepared or not. Even if a “Black-Swan” type storm were to occur well outside of your operational reach, you can almost certainly expect repercussions to your own supply chain. Preparation is key to minimizing disruptions and ensuring operations run smoothly. By working with supply chain partners and ensuring they agree to your disruption prevention plans, you can strengthen your working relationships. Even if your operations are based in a location that does not have “scheduled” weather events (hurricanes, tornadoes, wildfires, etc.), it pays to have a contingency plan and the proper infrastructure in place.
Mark Derks is Marketing Director at Blue Grace Logistics.