Abstract
A disastrous hurricane hit the East of the Caribbean and part of the United States in October 2012, resulting in more than 200 fatalities and economic losses worth more than $100 billion. This paper ties the supply chain impacts of the sandy to the various risks of supply chain management. The analysis involves a literature review of multiple sources from when the storm occurred to the most recent studies. The findings indicate that some risks involved include economic, social, and political related to the industries and logistics employees affected. Sectors such as energy, health, food and beverages, and transport were highly influenced by the event, thus causing various demand and supply shocks. The results show that the affected nations experienced massive losses, impacting logistics operations.
Introduction
In October 2012, Superstorm Sandy moved from the Caribbean Sea to the Atlantic Ocean and then to United States regions such as New Jersey and New York City. On an unusual track between the 24th and 30th of October, the hurricane visited the Caribbean east countries such as Bahamas, Cuba, and Haiti before moving to the US in Atlantic City, New Jersey, and some parts of New York (Haraguchi & Kim, 2016). Sandy caused more than 200 fatalities and economic losses of up to $4.2 billion in the Caribbean and approximately $97 billion in the US (Haraguchi & Kim, 2016). According to hydro-meteorologists, the Superstorm was caused by an interaction of a tropical cyclone with an upper-tropospheric trough, leading to a quick extra-tropical transformation (Zambon et al., 2014). The event was attributed to thousands of property damages, power outages, floods, and displacement of people in the affected regions.
Supply Chain Disruption Details
Following the damages and destruction of the Superstorm Sandy, the affected regions experienced supply chain disruption of power, water, food, and gas, among others. According to Kunz et al. (2013), more than 20 million people experienced a power outage lasting a few days to several weeks. The floods interfered with major clean water sources, making finding clean water to drink another emergency (Haraguchi & Kim, 2016). Food supply stores and factories were also affected, reducing the food supply for days (Haraguchi & Kim, 2016). The wind speed and precipitation made the Caribbean and US regions’ temperatures drop to almost zero-degree Celsius, contributing to many health issues. Due to the destruction of healthcare facilities, people could not access timely medical interventions (Burger & Gochfeld, 2015). The disruption caused limited access to these supplies, thus making it hard for normal operations.
Industry Sector Impacts
The highly affected sectors include food and beverages, energy, health, education, housing, and transport. People in the affected regions experienced limited access to drinking water, food, and other beverages (Burger & Gochfeld, 2015). Following damage to food and drinks supply stores and factories, high losses struck the food and beverages sector. The high winds were associated with landfalls and the destruction of power stations. According to Burger and Gochfeld (2015), at least 21 states, including New York, New Jersey, Maryland, Michigan, Maine, Tennessee, and Carolina, experienced power outages. The disruption of power supply adversely affected other sectors dependent on electricity for smooth operations.
The losses of the hurricane equally afflicted the health, education, housing, and transport sectors. According to Burger and Gochfeld (2015), at least 615 healthcare facilities in the Caribbean were destroyed or partly damaged to their functioning, while the US lost 21 cholera control centers to Sandy. Destruction of property included school facilities, which paused the normal operation of learning. The housing sector was afflicted where at least 300 homes in New York, 27,000 houses, and 5298 shelters were damaged in the East of the Caribbean (Haraguchi & Kim, 2016). Transport, either by air, land, or water, became a major problem, especially on the days of the storm. The landfalls in New Jersey caused severe destruction of roads, making it hard to move by vehicles (Zambon et al., 2014). Flights were canceled following bad weather and the destruction of airports in the affected areas. Furthermore, the high tides and waves of the hurricane could not allow for traveling by water.
Economic Risks Encountered
Demand Shock Encountered and Why it Occurred
In the regions severely impacted by the hurricane, there was reduced demand for air transport due to bad weather and airport destruction. Most Caribbean and US terminals remained open, but due to extreme weather and flooding, Sandy forced many airlines to stop flight operations (Lin et al., 2016). Airlines from North and South America grounded approximately 11 000 flights (Kunz et al., 2013). Cuba, Haiti, the Bahamas, and Canadian airlines canceled flights to protect their employees and the undamaged properties (Kunz et al., 2013). The flight demand decreased because, despite bad weather and people seeking safety, most travelers had their properties damaged.
Supply Shock Encountered and Why it Occurred
The US and Caribbean East regions experienced a reduced electricity supply following the power outage. In the United States, 21 states experienced a prolonged blackout, and in the first week, only 84% of these regions had power restored (Kunz et al., 2013). A power outage in the Caribbean caused massive problems because it was restored between 29th October and 11th November. The primary cause of this supply shock is that most urban operations are 100% dependent on the power supply. Tall buildings, ATMs, fuel stations, and other items dependent on the energy supply could not be accessed (Lin et al., 2016). Floods destroyed main power plants when Sandy hit a region with windy rainfall. The brisk winds also made electricity posts and wires fall, where some wires would cause fire upon colliding with other objects (Lin et al., 2016). The loss of power caused delays and a lack of access to many services, translating to billions of direct and indirect losses.
Societal Risks Encountered
Risks Experienced by Logistics Workers
Logistics workers suffered from poor health-related diseases, deaths, and disrupted labor in their respective work sections. When floods invaded warehouses, important ports, head offices, and factories, they caused temperatures to drop close to zero-degree Celsius (Kunz et al., 2013). The severe temperatures resulted in cold air outbreaks, which affected the logistics workers. The outbreak added to other health concerns, including airborne diseases and cholera outbreaks in the affected areas (Kunz et al., 2013). The outbreaks and the storm caused direct and indirect deaths of logistics members and their families (Kunz et al., 2013). There was also a drop in labor demand in the few weeks when the factories and warehouses had to be closed for repair. For example, when Sandy made landfall near Brigantine in New Jersey, it damaged homes and warehouses not protected by the sea walls (Kunz et al., 2013). Therefore, the logistics workers experienced labor demand before the repairs could be completed.
How Supply Chains Protected their Employees
Supply chains ensured employee safety by protecting their livelihood and operations at work. When the storm struck, the supply chains allowed their employees to seek their safety and those of their families (Rosenzweig & Solecki, 2014). That included closing supply stores and ensuring minimal movement while the weather was dangerous. Before the storm, manufacturers, retailers, and distributors ensured their employees had adequate emergency tools such as fuel vehicles and generators. For example, Target had closed 60 stores but had 30 generators ready to curb power shortages (Haraguchi & Kim, 2016). The supply chain employers also protected employees by ensuring continued salary payments even after the property damages. For example, Walmart closed at least 80 of its stores, but even before they could claim insurance compensation for the minimal damages done by Sandy, the stores opened and operated normally, including paying employees’ salaries (Rosenzweig & Solecki, 2014). They also ensured constant communication before, during, and after the Superstorm to ensure minimal damages were recorded.
Political Risks Encountered
The affected nations’ governments deployed various responses, including Disaster Relief Appropriations Acts, to restore cities. In the US, Federal Emergency Management Agency (FEMA) performed a large-scale response that involved local, state, and federal resources and officials to restore millions of people impacted by the hurricane in various states (New York City Government, n.d.). Particular attention was paid to the most impacted states, New York and New Jersey, in providing disaster relief to the people and businesses. For example, in enforcing the Disaster Relief Appropriations Act of 2013, New York City received approximately $4.2 billion in aid for the $19 billion in damages for community development block grants (New York City Government, n.d.). These funds impacted promoting businesses, rebuilding houses, and helping displaced tenants.
In the Caribbean nations, federal emergency response was combined with help from other unaffected nations. For example, Cuba had few to no resources to respond to this disaster emergency. Therefore, they appealed for 5 453 221 Swiss francs to work with the Cuban Red Cross in aiding 15 000 affected families for nine months (Rosenzweig & Solecki, 2014). Haiti was the most affected nation in the Caribbean regions that experienced Sandy. Following the deaths of at least 60 people with 18 000 other homeless, the Haiti government worked with the United Nations humanitarian programs to appeal for aid (Rosenzweig & Solecki, 2014). With the government help from Red Cross and well-wishers, the UN provided emergency health services. They also tried to restock the most limited supplies, such as food and water, but the impassable roads and rivers became an obstacle. World health organization (WHO) equally contributed to the health response of Haiti.
Conclusion
Lessons from the Event
The primary lessons learned from this event are based on the importance of disaster control in supply chain management. One of the lessons is that the suppliers must be prepared for contingencies when such a disaster hits a region. The retailers, manufacturers, and distributors who took the storm warning seriously and took emergency measures were not much affected. The other lesson is that all business owners should plan and protect their firms against all emergency risks. Logistics employers who had insured their businesses against natural disasters were compensated against Sandy damages. The last lesson is that the most important measure is seeking personal safety during disasters.
Closing Remarks
The supply chain risk management effectively reduced supply shortages during the event. In the most developed US areas, such as New York City, supply disruption did not last more than a week. This is compared to Haiti cities, whose supply shortages continued for over a week. Therefore, with proper supply chain risk management, it is possible to minimize the risk of a disaster such as Sandy.
References
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Kunz, M., Mühr, B., Kunz-Plapp, T., Daniell, J. E., Khazai, B., Wenzel, F., & Zschau, J. (2013). Investigation of Superstorm Sandy 2012 in a multi-disciplinary approach. Natural Hazards and Earth System Sciences, 13(10), 2579-2598. Web.
Lin, S., Lu, Y., Justino, J., Dong, G., & Lauper, U. (2016). What happened to our environment and mental health as a result of Hurricane Sandy? Disaster Medicine and Public Health Preparedness, 10(3), 314-319. Web.
New York City Government. (n.d.). Sandy and its impacts. City of New York. Web.
Rosenzweig, C., & Solecki, W. (2014). Hurricane Sandy and adaptation pathways in New York: Lessons from a first-responder city. Global Environmental Change, 28, 395-408. Web.
Zambon, J. B., He, R., & Warner, J. C. (2014). Tropical to extratropical: Marine environmental changes associated with Superstorm Sandy prior to its landfall. Geophysical Research Letters, 41(24), 8935-8943. Web.