Find out why effective hurricane preparedness means leveraging digital transformation to gain better insight into your supply chain.
Hurricane season is a crucial time to consider disaster preparedness and disaster relief programs available so that individuals and organizations can proactively prepare for and actively respond to negative circumstances that may arise. More specifically, it’s crucial to optimize fuel supply chain operations so that emergency demand can be addressed and mitigated in a timely fashion. The challenge, however, is developing a model for estimating fuel demand and making informed decisions on supply distribution, considering hurricane path and severity.
Hurricanes can severely congest supply chains and contribute to product shortages, as they have the potential to wreak havoc not only on transportation systems and highways but also on the supply chain hubs themselves, causing other suppliers to provide coverage and relief to compensate.
READ MORE: Analytics & Optimization: How You Can Stay Ahead Of Disruptions From Hurricane Season
The Atlantic hurricane season takes place from June 1st through November 30th, during which the Gulf Coast region is particularly susceptible to catastrophe. Although less obvious, the rest of the nation is still vulnerable to the consequences of these disasters. Louisiana’s refineries contribute to almost one-fifth of the United States’ crude-processing capacity, posing an extreme risk to nationwide fuel supply in the event of an emergency. Hurricane Ida is a recent example of the detriment caused by these natural disasters. On August 29, 2021, Ida made landfall in Louisiana as a Category 4 hurricane. As a result, 96% of crude oil production and 94% of natural gas production in the U.S. federally administered areas of the Gulf of Mexico (GOM) were shut-in. These shut-ins impacted August production, as well as production in the following months as refiners slowly ramped up volumes again. Refineries needing infrastructure repairs were offline for longer periods, thus tightening supply and leaving space for unfilled demand.
READ MORE: Myth vs. Reality: First Steps In Supply Chain Optimization
Effective hurricane preparedness means leveraging an organization’s distribution process to allow space for adaptive and agile responses to these catastrophic events.
