The 2006 hurricane season has passed without incident. Hurricane Ernesto made landfall in North Carolina at the end of August inflicting only minimal damage and few injuries. In September Hurricane Florence caused some power outages and some minor damage in Bermuda and southeastern Newfoundland.
Through the middle of November the National Weather Service's National Hurricane Center in Miami tracked only nine named tropical storms and hurricanes, compared to a record 27 storms in 2005. No tropical storms at all formed in the Atlantic Ocean during the month of October, which hasn't happened since 1994.
In early summer scientists at the National Oceanic and Atmospheric Administration (NOAA) and several affiliated organizations predicted a much different story. Like last year a number of factors, including warmer than average sea surface temperatures, reduced sea-level air pressure and the structure of the easterly African jet stream, favored an active hurricane season. NOAA predicted a high likelihood (75% chance) of an above-average hurricane season, a 20% chance of a normal season and a 5% chance of a below-average season.
With full recovery from 2005's Hurricane Katrina still years away, the slow hurricane season has a lot of people heaving a sigh of relief. Companies with operations and customers in hurricane-prone areas have another year to prepare for the next big storm.
Last year's hurricane season was on everyone's mind at a panel discussion on disaster recovery at the recent TransComp and Intermodal Expo in Fort Lauderdale sponsored by The National Industrial Transportation League (NITL), Intermodal Association of North America (IANA) and the Transportation Intermediaries Association (TIA). Discussion began with differences between a supply chain crisis and a disaster. A crisis, the panelists agreed, is anything disrupting the supply chain in the short term, whether it's a fire on a container ship or a blizzard that prevents employees from getting to work. Disasters have longer reaching effects and present much more difficult challenges.
Howard Bacon, manager of transportation operations for International Paper (Memphis, Tenn., www.internationalpaper.com), admitted they were not well prepared for the lack of power and communications in the wake of Katrina. Like a lot of other companies, they did not have good contacts for fuel, machinery and basic supplies, and struggled to pull people together. They eventually recovered but lost a lot of time.
"It caught us by surprise and it shouldn't have. We've learned from that," said Bacon.
Key to its own quick recovery, according to Jerry Ulm, sourcing leader for North American transportation for Owens Corning (Toledo, www.owenscorning.com), was its long-term relationships with a core group of carriers. When making purchasing decisions buyers must look beyond price and also consider capacity. When you have a true partner carrier, he said, you don't have to call them, they will call you when there's a crisis.
"We were at least 35-40% under market price during the disaster [Katrina]. Our carriers held the line to give us that because of the relationship that we had, and we will reward them for years to come because of that," said Ulm.
One of the biggest lessons in preparing for future crisis and disaster recovery efforts, the panelists agreed, was to acknowledge that the next event—whether it's a hurricane, a flood, a blizzard or a fire—won't be like the previous one. The safety and security of employees will still be the first priority, followed by setting up communications and everything else necessary to get operations back up and running. But it's impossible for any plan to cover all of the details.
While it's good to go back and look at what might have happened in the past, said Dan Bolzenius, manager of supply chain services for Sysco Corp. (Houston, www.sysco.com), every blizzard is different from the one before. For example, a distribution facility will have power but people won't be able to get to work, or they will be able to get to work but product won't be able to come in, or it won't be able to ship out.
"It's not the plan, it's the people," said Bolzenius, underscoring the biggest lesson in any company's preparation for disaster recovery.
