Natural Disasters in Freight and Transportation

June 1st marks the beginning of summer for most, but in the freight and transportation industry it also marks the beginning of hurricane season — a season that peaks in early August and can last through the early winter. A typical season could bring dozens of tropical storms, sustained winds of 39-75 mph with a potential of hurricane force winds of up to 110+ mph. For many of us that means a change in vacation plans, but for the transportation and logistics industry, the impact could be overwhelming. The shipping industry is affected by natural disasters, more than any other industry in the country which is why fleet management companies across America have positioned themselves to be proactive and prepared even in the event of a hurricane.

Insight, efficiencies and growth are part of a consistent strategy for a company like EFS who works with fleets and fleet managers every day. They rely on technology and innovative products to help address chaos in the event of a disaster.

“Our business was developed with the intent of positioning operating platforms in a distributed and virtualized environment with redundant and divergent networks and data centers. The results are flexibility, reliability and stability in any situation, and particularly in times of disruption”. – Josh Smith  

Shortage of Drivers and Fuel

Recently thousands of shipping containers with desperately needed aid were trapped at the Port of San Juan. Due to a downed communications network and a devastated infrastructure, a shortage of drivers made it impossible to move aid to where it was needed.

Yennifer Alvarez, spokeswoman for Puerto Rico’s governor said, “The problem has been with the logistics, the parts of the supply chain that moves the cargo from our terminal to the shelves or to the tables of the people in Puerto Rico.” She goes on to say, “This hurricane was catastrophic.”

The same can be said in the hardest hit gulf states like Texas and Louisiana. With approximately 70% of the Port’s cargo handled by trucks, when a natural disaster hits, the industry is devastated.

Texas provides 30% of U.S. petroleum refinery capacity. The Texas Gulf Coast is home to 4.944 million barrels per day (b/d) of refining capacity, while the Louisiana Gulf Coast is home to 3.696 million b/d of capacity, according to the U.S. Energy Information Administration (EIA). When a natural disaster hits, oil companies in those regions shut down, devastating fuel and energy inventory and pricing, particularly in the freight sector.

Lastly, clear communication is critical in these situations. With cell towers down, many companies were unable to contact, hire or direct drivers to fuel sources. Companies like EFS are streamlining and consolidating tools and processes that can make fleet management more effective especially in times of disaster. The more proactive fleet managers are, the better prepared fleets are in situations where access to fuel is their livelihood.

The Cost

Together Florida and Texas represent about 15% of the U.S. economy. These two states also account for about 7% of U.S. trucking activity on a typical day and affect another 4% as important parts of truck circuits. Including other states affected by the storms in 2017, the total truck activity affected could be in the 15% range. While 15% might not sound like a large percentage to an average person, to the fleet management companies and drivers who are impacted, it is huge. By getting ahead of the potential disruption, some companies have turned to digital technology to manage, structure and track spending in these situations where spending management could mean the difference between halting operations during a disaster, or responding effectively to keep the fleet moving. By delivering meaningful data and information to help make decisions faster and smarter, and with fleet card solutions, EFS has enhanced systems to make business simpler and more efficient in a time where responsiveness is critical.

Noël Perry, a managing partner for FTR Transportation Intelligence, indicated that though the largest ripple effects of Hurricane Harvey will be “regionalized” where freight shipments are concerned, transportation managers across the entire U.S. “will be scrambling.” Perry goes on to say, “The combination of regional and fuel effects from Harvey, coupled with the electronic logging device (ELD) mandate in December, could be the catalyst to a pricing spiral.”

In order to address these concerns, companies are taking steps to be preemptive with innovative strategies and tools that address changing dynamics of a fleets day to day. As disasters affect the availability of fuel, lodging, and food. EFS has developed fuel cards that helps to manage and locate resources while also saving money on non-fuel and fuel purchases. These cards along with other visionary platforms and systems, provide relief for the drivers in these difficult situation, and confidence to the fleet managers who rely on efficiencies during a disaster.

It is clear that we can’t control the weather but we can take steps to be prepared, preemptive, and as productive as possible.

Resources:

https://ftrintel.com/blog/trans4cast-hurricanes-production-impacts-recovery/

http://ktla.com/2017/09/28/thousands-of-shipping-containers-with-needed-aid-to-puerto-rico-trapped-in-port-of-san-juan/