When 2 Catastrophic Hurricanes Disrupt the Supply Chain
In most cases, a single natural disaster or catastrophic weather event can be enough to disrupt even the most resilient supply chain. But when two major hurricanes impact the United States within two weeks of one another, the effects can be downright debilitating, as many organizations are now realizing in the aftermath of Harvey and Irma.
Hurricane Harvey made landfall in Texas on August 25, wreaking havoc on major metropolitan areas like Houston. About two weeks later, Hurricane Irma left her initial footprint in Naples, Fla., and then made her way up the center of the state, leaving a path of destruction in her wake.
As companies in the impacted states assess the damage and dig into the cleanup process, it’s clear that each storm will create its own set of supply chain challenges. In ISM Analyzes The Future Supply Chain Impacts From Hurricane Harvey, ARC Advisory Group’s Steve Banker noted that 67% of supply chain managers expect input materials pricing to be negatively impacted over the next three months, and that 27% percent expect prices to be “negatively” or “very negatively” impacted.
“Fifty-six percent believe supplier deliveries will be at least somewhat negatively impacted over the next three months,” writes Banker, citing a recent Institute for Supply Management survey, “and another 19 percent expecting deliveries to be negatively or very negatively impacted.” Even six months out, Banker says 56% expect at least some negative impact on prices will continue.
According to the ISM survey, the key commodities most often mentioned as those that could potentially be in short supply over the next three months were fuel, plastic resins, chemicals, electronic components, feedstocks, chemicals (raw), gasoline, and polypropylene, among others.
But Wait, There’s More…