Hurricane Katrina: Preparedness Key to Survival

Sept. 1, 2005
As the effects of Hurricane Katrina continue to ripple through the U.S. economy, manufacturers and distribution centers in the path of the storm struggle

As the effects of Hurricane Katrina continue to ripple through the U.S. economy, manufacturers and distribution centers in the path of the storm struggle to return to something approaching business as usual.

When a company has been in business for 98 years it’s prepared for just about anything. And even though the devastation caused by Katrina has been beyond anything anyone imagined, UPS (Atlanta) was prepared and has resumed business at many of its 22 storm-impacted distribution centers.

“Our first concern,” says Norman Black, spokesman for UPS, “is our people. We had 2,200 employees in the impacted area and we are contacting every one of them, to the best of our ability.”

Black reports that while there has been tremendous devastation, as of September 1, there had been no reported injuries to employees. In terms of operations, when the storm came ashore, 22 of the company’s package centers, or hubs, serving the Gulf Coast, were immediately closed.

“Now that the storm has passed,” says Black, “we’ve been able to resume operation in every part of the area where authorities have allowed us to re-enter.” Nine facilities remain closed in the worst hit areas. Damage assessment is ongoing.

Coast Guard Petty Officer 2nd Class Shawn Beaty, 29, of Long Island, N.Y., looks for survivors in the wake of Hurricane Katrina last week. Beaty is a member of an HH-60 Jayhawk helicopter rescue crew sent to New Orleans from Clearwater, Fla. Photo: Petty Officer 2nd Class NyxoLyno Cangemi, U.S. Coast Guard.

“In the grand scheme of things, our people have done an incredible job of restoring service to every city where we’re allowed to operate,” says Black. Customers can check the UPS web site for the postal codes of areas where service has been indefinitely suspended. It is not accepting packages for these areas.

“There are other areas where we are operating under difficult conditions and have temporarily suspended our time-delivery guarantee, however we are getting through,” says Black.

Another part of the company’s approach to recovery from this disaster has been to launch what Black calls the Hurricane Relief Response that will total $1.25 million in donations to relief organizations and in-kind services for moving goods to the disaster locations.

“In addition,” he says, “we’ve established a special UPS employee relief fund whereby the company and UPS employees around the world can contribute to help fellow employees who have lost everything.”

Black says UPS’s air operations are back to normal, except for New Orleans. “We have work arounds in place for our disaster planning that directs traffic to where it has to go. For example, ground packages that come out of Texas headed for Jacksonville (Fla.) would normally roll through New Orleans. These are now being put in trailers on rail cars. The train then passes through Memphis to Atlanta to Jacksonville.”

Mike Zampa, spokesperson for APL Logistics (Oakland, Calif.) says, like all companies, employee safety and assistance to the victims has been the company’s first concern. “We’re pleased to report no loss of life at any of our facilities that were in the path of the storm,” he says.

APL operates two container yards in New Orleans and one in Mobile. “We’ve been fortunate and, given that reports are still sketchy coming out of there, have suffered no damage to cargo in those yards.” He adds the damage to equipment has been minimal with some equipment underwater.

The company also has a warehouse in Shreveport that sustained no damage. “The big impact,” says Zampa, “for our customers, has been the damage to the railroads. No cargo is moving into or out of the area on rail.”

APL is working with its rail partners to reroute cargo around New Orleans. A lot of cargo destined for other locations passes through New Orleans because it is such a large commercial center. “We’ve opted to route our cargo through Memphis for the time being,” he says.

Barge traffic on the Mississippi River has been halted, however this has had minimal impact on APL’s business, says Zampa, because most of its customers ship via rail and trailer.

Lockheed Martin (Fort Worth, Texas) is another company that had disaster plans in place, the benefits of which are being realized. The company has hotline numbers for employees to call and ask questions about plants and facilities. It also established hotlines for employees to call in and report to the company where they were and if they were okay.

The status of many of Lockheed Martin’s manufacturing operations remains day to day. Its assembly operations at the NASA facility in Michoud, La., where it builds space shuttle external tanks, will not reopen until September 26. No injuries were reported but the only way to get in is via helicopter. At the Stennis (Miss.) Space Center, where it tests space shuttle main engines, production is expected to resume shortly.

TNT Logistics (Jacksonville, Fla.), a third party logistics provider, dodged the worst of the storm.

“We have no operations directly in New Orleans or Biloxi or places like that,” says spokesman Russ Dixon. “We had some locations in the path after it moved inland, such as a warehouse in Olive Branch, Miss. and a warehouse in Moody, Ala. But they were out of power for 3 hours.”

He adds that the company hasn’t lost any roofs, no buildings have collapsed, and they have not experienced any flooding.

“What we’re doing now,” says Dixon, “is trying to assess what we, as a company, can do to help, and establish grass roots efforts for the employees to get involved. We’ve got a truck in our parking lot that people are filling with water, diapers, peanut butter and everything else you can think of. We can take it down to where the Red Cross is collecting other products.”

On the retail side, DrugMax, Inc. (Farmington, Conn.), says its St. Rose, Louisiana distribution facility has been closed. As part of its emergency response plan, DrugMax shifted operations from its New Orleans distribution facility to its Pennsylvania facility and is currently satisfying its customers’ distribution needs through that facility.

The company also announced that it has experienced no operational delays at its 77 Familymeds and Arrow Pharmacy locations, which are currently being serviced by key vendors. All of the pharmacies remain open and unaffected by Hurricane Katrina.

The Pennsylvania distribution facility, together with key direct vendor relationships, provides complete operational redundancy and has enabled the company to minimize any disruptions in service. DrugMax currently has no access to the St. Rose facility due to the hurricane and cannot assess the extent of the damage at this time.

Motor carriers such as Yellow Roadway are still assessing damage. Yellow Roadway had 20 terminals in the path of the storm. Reports are beginning to surface of extensive damage to some. With major highway bridges destroyed, schedules for the movement of goods in and out of the affected region is unknown at this time. Rerouting of trucks is currently underway.

Imperial Industries, Inc. (Pompano Beach, Fla.,) says it has completed a preliminary assessment of the physical condition of all of its facilities. The company operates three manufacturing and 11 distribution facilities in the southeast. Of the company’s major distribution facilities, only the Gulfport (Miss.) distribution facility suffered any hurricane damage. All of its other facilities, including its corporate headquarters, experienced no damage and are fully operational.

Based upon the preliminary assessment, managers believe that its main building in Gulfport sustained minimal damage and the inventory contained therein, which is the majority of the inventory at the facility, is undamaged and in saleable condition, and it’s delivery vehicles and lift trucks used at the facility are operational.

“The company’s immediate concern is for the health and safety of its employees,” says S. Daniel Ponce, chairman of the board, “their families and the communities hit by Hurricane Katrina. Our primary initial focus will be to assist our employees by ensuring that they and their families are safe and provided for. We will also work with the communities impacted in their rebuilding efforts.”

Management estimates that the Gulfport facility could be operational within three weeks assuming the necessary infrastructure, including roads and power, are restored.