One of the main challenges that the world of logistics and freight forwarding has to deal with is unpredictable weather patterns. Unfortunately, on Sunday, September 10th, hurricane Irma passed over the Florida Keys. At this point, Hurricane Irma had been categorized as Category 4 Hurricane and had sustained winds of over 130 mph.
Because of this, hurricane and storm surge warnings were extended, and a tropical storm watch was issued for various parts of America and the world including parts of the Caribbean. At least 72 people perished because of Hurricane Irma and thousands suffered extensive damage, much of which is still being determined.
The impact of hurricane Irma on logistics and freight forwarding
The customer was affected
As a category five hurricane, Irma was the most powerful storm that has ever been recorded in the Atlantic Basin. Obviously, one of the first things that freight forwarding companies thought about was the amount and value of the supply that was either damaged or stuck on a route. This was naturally going impact the customer because:
- Some demands would be left unsatisfied by the disruption of the supply chain.
- The limited supply available would make it impossible to fulfill some orders.
- There might have been other capacity distractions involved that worsened the situation.
- The time required to recover is still unknown and difficult to estimate.
Regional container transshipment hubs were impacted
Another impact of hurricane Irma was on the regional transshipment centers, especially those located in Florida and the Bahamas. Regional transshipment centers are vital to the supply chain because they service smaller ports that are unable to accommodate large container ships. Regional container transshipment hubs typically have large yard spaces to store containers that are waiting for connecting ships to be serviced.
Because of this, they are incredibly vital to the supply chain. The threat from Irma directly affected container transshipment hubs by damaging valuable tools such as cranes. The sudden loss of capacity led to diversions to other centers. It also even brought about a drop in the number of containers passing through these hubs, therefore, affecting business.
Services and costs in freight forwarding and logistics will be impacted
The damage from hurricane Irma also affected the services and costs in logistics. Significant damage was recorded in the Caribbean islands and Florida. The extent of the harm caused means that there will be a future demand for increased volumes of containers during the relief and rebuilding phase. The impact of hurricane Irma will be temporary, but it will take time until the supply chain can be rebuilt and replenished. Because of this, freight charges in this region are bound to go up.
Planning is the future of freight forwarding and logistics
Moving forward, supply chain leaders and freight forwarding companies will be forced to take preemptive strikes against forces such as hurricane Irma. Preparation will allow companies such as Sidoman to simulate several scenarios that can help to understand the potential impact of such disasters.
Additionally, preparation will also help to create response plans aimed at minimizing the consequences of the destruction. Preparation enables Supply chains to simulate and prepare for a supplier being down for a couple of weeks, they can plan for a spike in demand or source an alternative source should such a catastrophic disaster happen. Although it is impossible to predict the next hurricane, it is entirely possible to prepare for the next weather event before the national hurricane center issues a press release on an incoming storm.
In what other ways do you think that hurricane Irma affected the supply chain?