Supply Chain Rallies in Wake of Hurricane Ian

Hurricane Ian damage Damage to a trailer park from Hurricane Ian in Fort Myers Beach, Fla. (Rebecca Blackwell/AP)

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The trucks are rolling again. They’re going right into the areas Hurricane Ian devastated, and many are from companies with the regional or national scale to deliver emergency goods to communities where they also have affected employees and local stores in need of resupply.

Hurricane Ian was a deadly and destructive Category 4 storm that devastated Florida last month.

“Many companies make this type of response a best practice,” said Gary Petty, CEO of the National Private Truck Council. “In particular for water, food and medical emergencies. Government can’t do it all. It needs the partnership of the private sector. So they are acting as good-neighbor businesses. It’s pretty impressive.”



Gary Petty

 Petty

Since COVID-19, the majority of private fleets in his council have been growing their capacity, he said, with a couple doubling the size of their fleets in 2022 alone, “and it is all driven by demand, and demand is even greater now that so many communities have been devastated by the hurricane.”

Jason Miller, associate professor of supply chain management at Michigan State University, said, “The private fleet gives you some flexibility in [responding] and some additional control. Some of their volumes may get diverted there, but it is just a market at work.”

Jason Miller

Miller

Hurricane Ian is not going to cause a surge in spot prices, he said. “Not nationally, but it is probably going — if indeed, broader conditions are causing us to find a floor — to contribute an additional support for that floor in spot prices.”

Miller said DAT’s Trendlines on rates, updated Oct. 4, does show “we may be starting to approach a little bit of a floor, in that the national dry van spot rate prices in September averaged $2.46 a mile all-in. Right now, they are $2.47. So it appears we may be starting to find a little bit of floor on the dry van side.”

He said the upstream industries most affected by demand generated in response to Hurricane Ian, based on his analysis of the input-output accounts at Bureau of Economic Analysis, are:

  • Residential maintenance and repair, including building material retailers
  • Petroleum refineries, due to the combination of oil going into so many products that are necessary for maintenance and repair, such as shingles and plastics
  • Ready-mix concrete manufacturing
  • Trucking
  • Air conditioning and heating equipment manufacturing
  • Other plastic products like PVC pipe
  • Millwork for doors, windows and wood products.
  • On the non-residential side, the mix is similar but also includes steel mills and companies that make fabricated metal products used in construction.

“I don’t see this as being as disruptive as Hurricane Harvey was in 2017 because that really affected chemical manufacturing for at least a month or two,” Miller said.

He noted fertilizer production in Florida, “which I think is what everyone was most worried about from a manufacturing setting, did not get affected that much.”

Meanwhile, since COVID hit, there has been a much wider appreciation for the supply chain discipline, Miller said. “I no longer have to explain to people why I am a professor of supply chain management, and why Michigan State employs me. Pre-COVID, a lot of people didn’t even realize there were professors in this space.”

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Michigan State’s undergraduate supply chain management program received the top ranking from U.S. News & World Report for the 10th year in a row in 2021, the university noted online. Miller said the program has nearly 100% job-placement rates. The average starting salary after earning an undergraduate degree is about $69,000.

The National Private Truck Council began in 1939 as the National Council of Private Motor Truck Owners, a group strictly focused on in-house private truck fleets separate and apart from for-hire trucking firms. Over the years, it adapted to changing market conditions, NPTC noted.

With the trends of consolidation, merger and outsourcing over the past decade, NPTC has become a more blended association, according to the Alexandria, Va.-based group.

 

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