Hurricane forecasts have come out from several sources, including from Colorado State University, which recently predicted the Atlantic will produce a near-normal 12 storms during the six-month hurricane season that officially began June 1st. Of the 12 storms, five could become hurricanes and two could grow into major systems of Category 3 or stronger. The U.S. has a 50% chance of being struck by a major hurricane, just below the 20th century average of 52%, according to Colorado State University. Major disruptions caused by a hurricane or severe storm can result in facility damage and delays to all businesses including in the global trade and logistics sector.
To help prepare clients for this hurricane season and minimize potential property damage or business interruption should a catastrophe occur, there are certain measures that the global trade and logistics industry should take – from manufacturers, importers, exporters, distributors, and wholesalers to transportation service companies including customs brokers, freight forwarders, property brokers, 3PLs and warehouse operators. These risk management and loss control measures include the following.
- Ensure clients have a comprehensive written hurricane/catastrophe emergency plan in place that is designed to mitigate exposures. The plan should be comprised of the following:
- Emergency roles assignments and responsibilities. This should include a crisis team that can make decisions and communicate them across the supply chain to launch an effective response. Provide training on these responsibilities on a yearly basis at minimum.
- A set of procedures outlining what to do. Anticipate steps to take and run different scenarios (best, average, worst-case) by the team.
- Assembly of emergency supplies and equipment at a safe location, including plastic tarps, maps, emergency lighting, battery-operated radio, tape for windows, lumber, and nails, etc.
- Plan for salvage and recovering, including lining up key contractors and vendors to assist with recovery services.
- Line up suppliers: Nurture strong relationships with several suppliers to provide flexibility if/when disaster strikes and you need to secure resources from an alternate provider.
- A business continuity plan: Develop process-level plans that map solutions to the risks and strategies you identify. Encourage internal supply chain teams and external vendors, technology providers and supply chain partners to help develop the plan. Also, have a backup plan for every supply chain stakeholder. At the very least, focus on the vendors and partners most essential to the day-to-day operations of the company’s supply chain. Review vendors’ business continuity/disaster recovery plans and work with them to get all plans in sync. Review plan annually.
- Stay informed, monitoring the status of the hurricane as it develops.
- Secure the facility’s roof, and repair any potential problems.
- Protect exterior windows and doors. Consider installing wind-resistant windows.
- Fuel up – this includes generators, fire pumps, company-owed vehicles; fill aboveground tanks to capacity to prevent wind damage.
- Secure assets: This includes all nodes in the supply chain: production facilities, distribution centers, fleet, terminals, suppliers, etc. In short, anything that could be sidelined by a disaster. Make sure the company has the products and supplies needed when the disaster is over.
- Protect computers, stock, and essential machinery, and consider moving valuable and/or critical stock and materials to a safe location.
- Prepare for flooding.
- Make preparations to shut down operations temporarily if needed.
- Have an evacuation plan: Outline detailed plans for evacuation and shelter-in-place plans and practice regularly. Know where to go if asked to evacuate. Make note of alternate routes if major roads are clogged or close. Establish backup locations for key facilities and a central meeting place for employees.
- Ensure emergency response team remains at a facility if it’s safe and is prepared to respond.
- Continue to stay up to date on the weather, monitoring and tracking the hurricane’s or storm’s landfall, and update management and maintenance.
- Inspect the property (if not dangerous) and look out for roof leaks, pipe breakage, fire or structure damage.
- Monitor all equipment throughout the hurricane.
- If there is a power failure, turn off all electrical switches to prevent reactivation before necessary checks are completed.
After a Hurricane
- Secure site to prevent any one who is not authorized to enter.
- Contact broker/insurer for claims adjusting and immediate damage assessment.
- Organize emergency crews for salvage and cleaning operations.
- Notify utility companies of any outages or damages.
- Notify contractors to begin repairs if it’s safe to do so.
- Initiate salvage operations.
- Review effectiveness of the disaster plan and revise if needed.
Roanoke Underwriting assists agents and brokers in securing the proper insurance solutions for your clients. We provide broad coverage at competitive pricing and are available to facilitate the proposal process in putting together an insurance portfolio that addresses you client’s risk profile. For more information about our products, contact one of our specialists at 1.855.213.4545.