In an increasingly complex and uncertain global supply chain operating environment, forwarders and their shipper customers must be prepared to handle crises when they occur, whether they are in the form of natural disasters such as hurricanes and floods, geopolitical or labour issues, or health-related, such as Covid-19.

Preparing for disruptions, delays, and damage to infrastructure and equipment, in the case of a hurricane, for example, is particularly difficult. Hence, it is crucial for logistics providers to be prepared and take proactive measures to minimize the impact of disruptive events and ensure a swift recovery.

The first step is to do a risk assessment to identify potential supply chain vulnerabilities. Comprehensive contingency plans should be developed that outline actions to be taken. These plans may involve alternative transportation routes, backup storage facilities, and close coordination with customers and suppliers.

Here are essential continuity planning steps that forwarders can take to prepare for logistics disruptions.

The development of a disaster management continuity plan…

1 An area that is particularly critical for continuity planning is collaboration and communication. Timely, consistent communication with all stakeholders, including customers, suppliers, carriers, and government agencies, is crucial during disruptive events. You’ll want to contact the shipping carriers and suppliers involved in your client’s shipments to determine their contingency plans and any potential delays. Be proactive in coordinating with them to explore alternative transportation routes and options. Adopt a cloud-based digital freight management platform that employs collaborative, communication tools to ensure everyone is informed of a situation and can work together to find solutions. By notifying shippers as early as possible, they can quickly address shipment exceptions and reduce unanticipated costs. Moreover, proactive communication supports meaningful coordination between a forwarders’ team and a shipper’s operations and logistics group in re-establishing operational and logistics schedules. This collaborative exercise fosters the development of alternative solutions to get cargo flows back up and running.

2 Identify alternative transport routes and backup storage facilities. Before a weather event shuts down a major port or rail network, be prepared with knowledge of your ocean or air transportation vendor’s scope of services in order to be prepared with alternate routing options.  Additionally, compile data about land-based routing options in those markets where your customers’ supply chains could be impacted.

3 Create a strong partner network to support supply chain resiliency, flexibility, and safety. Join a collaborative industry network that securely connects your business to global shipping industry participants 24/7. Magaya customers have access to the Magaya Network, a community of Magaya users, throughout the world, that allows participants to access market updates from agents in other countries. They can also electronically exchange transactional information, including shipping documentation with other global Magaya users. A collaborative, global industry network that offers timely peer-to-peer dialogue when supply chain disruptions are occurring is an invaluable tool that provides critical market and infrastructure information. It allows for building strong, constructive global relationships through direct communication and helps facilitate reliable origin-to-destination cargo flows. Information can be exchanged faster, more securely, and more accurately when sent electronically in the cloud.  

 Social media may present an opportunity to expand communication capabilities. Companies are tuned into the power of social media and the existence of the citizen journalist. Understanding and engaging with social media may provide a useful information resource during disruptive events.

Cloud-based technology is less vulnerable to hazardous weather events and offers greater flexibility, access to data, and reliability when disruptions occur. Relying on old, on-premise systems is limiting, especially if you’re unable to physically travel to your headquarters location. Those businesses with modern, connected, cloud-based systems with redundancy built in can pivot more quickly by working remotely to access important business data online for effective business decision-making.

6 Strengthen physical infrastructures and leverage weather forecasts when a hurricane or major storm is on its way. This allows you to anticipate potential weather-related disruptions and adjust operations accordingly.  Regular monitoring of weather updates allows you to stay informed about a hurricane’s path, intensity, and potential impact on physical infrastructures, such as ports, roads, and bridges. In addition, it provides the opportunity to protect warehouses and distribution centres by installing hurricane-resistant doors and reinforcing roofs when hazardous weather conditions are forecast.

Protect shipments with cargo insurance. Cargo should be adequately insured for any potential damage or loss caused by weather events or other possible disruptions. Carefully review the insurance policy and terms to determine if it is tailored to the cargo’s value and to be aware of any exclusions that could limit coverage.

8 A safeguard that can strengthen shipment continuity is the implementation of a cloud-based platform for advanced tracking and monitoring of shipments. These systems provide timely visibility into the location of cargo along its journey. This enables logistics providers to proactively work to reroute shipments to avoid areas affected by disruptive events.

In the fall of 2012, a destructive hurricane, Superstorm Sandy, hit the New York metropolitan area. In its path was the Port of New York and New Jersey, the 3rd largest port, based on container volumes, in North America. Deputy Baroni, Executive Director of the Port Authority of NY/NJ, at the time, said  The storm’s impact on Port Authority-related operations delayed or cancelled flights for 900,000 airline passengers; diverted 25,000 shipping containers to other ports; and spilled 125 million gallons of seawater into the World Trade Center site. 
There was also a complete shut down of marine terminals at the Port. When these natural disasters occur the impact on supply chains is devastating. As a logistics provider, it may be well advised to recommend to customers specific strategies to address risk, such as splitting their distribution networks between East and West Coast ports.  

 No one can predict when or where the next emergency will occur. But we can reduce the impact of disasters through planning, working cooperatively, and bolstering communities. 

Jock Menzies, President, the American Logistics Aid Network

Mitigating the impact of hazardous weather on global supply chains requires a combination of proactive planning, advanced Cloud-based technologies, strong communication, and the ability to adapt swiftly. By implementing the planning strategies outlined here logistics providers can enhance their resilience and better serve their global shipper customers during challenging times.

Nomar Ramis, Chief Customer Officer at Magaya