In addition to wreaking havoc on those living in the affected areas, recent hurricanes have created a domino effect for companies. Weather-related shipping problems have slowed down business nationwide.
“When it comes to natural disasters and the impact on shipping and business, the back-to-back nature and power of the two recent storms—Irma and Harvey—are like nothing we've seen in the past century," believes Tim Story, executive vice president of freight operations for Unishippers. The company is a third-party logistics company that services thousands of small- to medium-sized businesses nationwide.
“The storms have resulted in a severely damaged transport infrastructure," Story says. “That includes bridges, rail lines and roads across Florida, Georgia and [Texas]. But the impact is not limited to those areas. Every state is experiencing the results of delays and backlogs."
With brick-and-mortar retail closures at an all-time high, it's already a challenging time for businesses, according to Marc Gorlin, founder and CEO of Roadie, an app-based service that features “on-the-way" delivery that enables businesses to use vacant space in passenger vehicles to transport products.
—Marc Gorlin, CEO, Roadie
“Retailers are desperate to compete in an environment where margins are already razor-thin and customers have come to expect free same-day and next-day shipping and delivery," says Gorlin. “Obviously, devastating events such as Hurricanes Harvey and Irma add to that stress. Stalls, lost shipments and blocked shipping routes cause a ripple effect that impacts every part of a business."
Tips for Dealing with Shipping Problems
Whether shipping delays have affected your business directly or indirectly, your bottom line can suffer. Consider trying these four tips for dealing with shipping challenges now and in the future.
1. Communicate with your customers.
“What customers and vendors crave most during uncertain times is frequent communication to manage expectations, address uncertainties and quell anxieties about your ability to do business," says Gorlin. “Assure your customers you're being proactive in not only working to get your traditional shipping lanes back into full effect, but that you're also arranging alternative delivery options to get items out as efficiently as possible."
Keep the dialogue going with consumers, agrees Josh Wiesman, founder of Smilo, which produces children's feeding and soothing products. “Customers located in the affected areas are already in highly stressful situations," says Wiesman, who experienced Hurricane Katrina. “At Smilo, we maintain an open dialogue with customers to assure them while we work on their shipping issues."
2. Have shipping backup plans.
Alternative methods of getting products to customers and receiving supplies may keep you from losing business.
Backup plans are critical, believes Erik Morton, vice president of strategy and corporate development at CommerceHub , which promotes products and provides drop shipment services. “It's good for the shipper to have a battle-tested business continuity plan. This can include having inventory geographically distributed to multiple fulfillment partners in different parts of the country. This allows the seller to keep shipping from other locations when one of their partners has a disruption caused by a natural disaster."
Businesses that use a third party logistics partners have an edge, agrees Story. “Such businesses have access to a larger segment of various types of carriers, including airlift, ocean, rail, truck and small package. If businesses contract with one carrier, when that carrier is affected, they're stuck."
3. Consider weather-related insurance.
Shipping carriers aren't liable for damaged or lost shipments when factors outside of their control occur, such as natural weather disasters, according to Story. “A carrier can take every step possible to minimize any future issues, such as not sending shipments into the affected areas, but items lost or damaged as a result of the storms are not covered."
Given the fact that losses can be catastrophic for a business, Story suggests that businesses look into getting insurance that covers weather-related damages.
4. Be patient.
The effects of the recent weather events will have an impact on shipping capacity for quite some time.
“Time sensitive priority shipments, such as food, water and supplies, will take precedence over commercial business," says Story. “Priority shipments flagged to support disaster recovery efforts will shrink the capacity for non-priority shipments."
Shipping limitations and the fact that Hurricane Harvey hit Houston oil refineries will also most likely create price increases in shipping, believes Story.
"Rebuilding takes time, and that's something you want to relay to your customers," adds Gorlin. “Assure your customers that you're working hard to resume business as usual."
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