While supply chains continue to wrestle with effects of COVID-19, here comes another challenge: hurricane season. Natural disasters like hurricanes often throw a wrench in the flow of freight, for example, as transportation is re-routed and resources are re-allocated.

When it comes to your freight, what should you expect during these times? Let’s look at 2017’s Hurricane Harvey as an example. DAT Freight & Analytics puts good perspective on the impact of a hurricane, using this event as the example. As noted by DAT, Hurricane Harvey triggered a massive reset of supply chains in Houston, a major freight hub. Transportation had to be rerouted causing truck shortages throughout the region. Post storm, emergency supplies are brought in, and inbound rates for freight tend to rise sharply for a period.

This matter comes into focus in the aftermath of Hurricane Laura, the Category 4 hurricane that struck the Atlantic coast at the end of August.

Some perspective from DAT shows the impact Hurricane Laura has had on freight costs:

  • In the aftermath of Hurricane Laura, New Orleans and Houston inbound load volumes rose by 26% week-over-week. Conversely, says DAT, outbound capacity tightened and pushed rates up by 7% even though outbound load volumes dropped 10% week-over-week.
  • Despite total shipping volume remaining flat in July, the percentage of total truckload freight moving on the spot market increased from 12-15% of the market to 21%. As a result, overall spot market volumes moved up 2.1% month over month, according to the DAT Truckload Volume Index – 3.7% higher than in July 2019.

Another index to watch is the Cass Freight Index Shipment. According to the latest report, the Cass Freight Index showed that sequential volume improvement is improving (up 4.8% month-over-month in July), yet remains down year-over-year as well as down compared to the first quarter of 20202.

Focus on Resiliency

This further emphasizes the need to have contingencies built into your supply chain—and when concepts like an “interconnected network” from your suppliers truly comes into play.

Let’s rewind back to Hurricane Harvey in 2017 once more. The devastation it caused didn’t spare Ryerson’s location in Houston. For roughly four days this location was unable to open due to damage and flooding—and that meant an inability to serve customers in the surrounding areas, such as San Antonio and Austin, during that time.

This is where Ryerson’s interconnected network of more than 100 locations kicked into gear. Incoming calls were diverted 240 miles away to the Dallas location where representatives were able to serve customers and arrange for shipments. In some cases, deliveries were arranged directly from processing locations in nearby Atlanta, Georgia and Little Rock, Arkansas to customers.

Due to the scale and connection of our network, Ryerson was able to ensure customers would not fall behind in their production schedules while the Houston location got back up and running.

This is the epitome of supply chain resiliency, providing national scale with localized presence.

Now ask yourself this: Can your supply chain absorb the shock of a natural disaster?

Find out more about how Ryerson’s Resilient Supply Chain can help your business.

 

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