Sandy’s Supply Chain Wrath

“The best laid schemes
of mice and men
Go often awry,
And leave us nothing
but grief and pain.”

The poem by Scottish poet Robert Burns is an apt epitaph for the sudden disruptions of carefully timed supply chains wrought by Hurricane Sandy on Oct. 29, which closed East Coast ports from Virginia to New York.

Virginia, Baltimore and Philadelphia were able to reopen by Halloween, but the Port of New York and New Jersey, the third-largest U.S. container port, was hit by devastating damage, flooding and power outages that was expected to keep the port closed until at least through last weekend. “It looked like a little kid’s Erector set that was tipped upside-down,” said Jim Devine, president and CEO of Global Terminals, which includes Global Terminal in Jersey City and New York Container Terminal on Staten Island. “This is as bad devastation as you can possibly imagine short of an explosion.”

Shippers and freight forwarders were left scratching their heads, wondering where their containers were, because inbound ships were already being diverted to the Port of Virginia.  Retail importers worried the late arrival of consumer products would hurt peak-season sales that depend on the timely arrival of Asian-made products.

And container line employees who might be able to tell importers and exporters where and when their cargoes might arrive were shut out of their offices by power outages in northern New Jersey, where most of their offices are clustered.

Forwarders on Long Island also were hamstrung by power outages. Telephone service was spotty; importers couldn’t find out whether their containers were on ships anchored off New York or being diverted to other ports in the Northeast that had reopened. “We won’t find out until next week if there are carriers that say, ‘We’re not hanging around New York,’ ” said Geoffrey Giovanetti, managing director of the Wine and Spirits Shippers Association.

It’s a scenario that’s becoming all too familiar to harried logistics executives, who saw their supply chains broken last year by the tsunami and nuclear disaster in Japan and the floods in Thailand. The closing of New York-New Jersey terminals wasn’t that bad, because the delays would be temporary. But even temporary delays could be devastating to retailers who were left without consumer products they had advertised as being on their stores’ shelves this week.

Importers with fresh produce in reefers were particularly vulnerable because lengthy delays could spoil the food. “The longer the port is closed, the worse it is for perishables,” said John Martin, principal of port consultant Martin Associates.

“We’ve seen this a couple of times before, but this one hits closer to home,” said Greg Kefer, vice president of corporate marketing at GT Nexus, the software company that enables carriers and shippers to interact on a cloud-based communications platform. “It’s events like this that are going to put the supply chain on the front burner because most shippers don’t have visibility in real-time as to who’s got what where.”  

Contact Peter T. Leach at pleach@joc.com and follow him at twitter.com/petertleach.

 

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