Hurricanes and Supply Chain Disruption

As the Port of Houston and other Gulf cargo gateways recover from last month’s big storm, Hurricane specialists have identified the most vulnerable regions in the nation's supply chain.

According to CoreLogic, a global property information, analytics and data-enabled services provider, more than 6.6 million homes on the Atlantic and Gulf coasts are at risk of hurricane storm surge inundation with a total reconstruction cost value (RCV) of nearly $1.5 trillion. The implications for ports, DCs, and warehousing are obvious, say researchers.

“Ports and warehouses are especially vulnerable to hurricane driven storm surge,” says Dr. Tom Jeffery, senior hazard risk scientist for CoreLogic. “Due to their location on or near the coast, as well as the fact they are often not built very far above ocean level puts many of them at the highest risk of flooding damage from storm surge.”

Jeffery adds that in many places along the coast, a typical Category 1 hurricane would generate enough storm surge to cause flooding damage to harbor facilities. Often one of the more overlooked aspects of storm surge damage is the impact it has on transportation infrastructure.

“Much of the discussion related to surge damage is focused on residential and business property losses, and rightly so, due to the total economic impact,” says Jeffery. “But there is no question that infrastructure, including roads, rail lines, bridges, and even airports can also suffer damage during a storm surge event.”

Jeffery notes that even if warehousing is protected, the ability to move goods can be stymied by flooded roads, undercut railroad tracks and weakened bridge supports. In addition, the massive amount of debris that is generated during a surge event not only causes damage as it moves with the surge, but can then disrupt transportation networks as it is deposited by the receding floodwater.

“It is a two-pronged threat in that the locations of goods can be impacted by the flood water and the routes used to transport goods can be interrupted,” he adds.

The CoreLogic analysis examines risk from hurricane-driven storm surge for homes along the Atlantic and Gulf coastlines of 19 states and the District of Columbia, as well as for 84 metro areas. Homes are categorized among five risk levels, including Low, Moderate, High, Very High and Extreme. In addition to the number of homes at risk, the analysis provides RCVs, which indicates how much is required to rebuild the property, including labor and materials, and assuming worst-case scenario at 100-percent destruction.

At the regional level, the Atlantic Coast has more than 3.8 million homes at risk of storm surge in 2015, and the Gulf Coast has just under 2.8 million homes at risk and nearly $549 billion in potential exposure to total destruction damage.

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