As we moved into the holiday season—one of the busiest, most complex times of the year for supply chain—things only got more tangled. Hurricane Sandy, of course, devastated the East Coast; another nasty, but not-quite “super storm” piled on a week later.
Gregory Daco, a senior economist with IHS Global Insight, told the New York Times that the region is responsible for about $3 trillion in output—approximately 20 percent of the country’s total gross domestic product. “Part of what was lost will be delayed,” he told the newspaper, “but part is lost forever.”
New York’s port system—including New Jersey—handled $208 billion in cargo last year. Sandy closed the ports; how much was lost still is being totaled. The delays can cause losses that will flow through the entire season.
In that same Times article, Paul Tsui, chairman of the Hong Kong Association of Freight Forwarding and Logistics, reported that several of his New York-area customers were declaring their warehouses totaled and that the merchandise will be have to be written off as an insurance loss. The closings and delays, he said, will leave those who do still have merchandise with limited prospects: send by expensive air freight; pay a penalty to retailers for late shipments; or face canceled orders.
The most tragic element of Superstorm Sandy is, of course, the human loss and devastation. Speaking purely from a supply chain perspective, Sandy and her ilk just emphasize one fact: The question isn’t will something happen, it’s when will it happen?
Risk management is an issue we feel very strongly about at Supply & Demand Chain Executive. You’ll see it on our Website, read about it in our print issues and hear about it during our Web seminars. Please apply the lessons you learn.
Now, welcome to the December Green Awards issue, our fifth annual. With this issue, we again cite companies implementing sustainability strategies within their own supply chains and providers of supply chain solutions and services who helped their customers achieve sustainability goals. While not all-encompassing, we do strive to provide a broad range of options that you can apply to your own pursuit of sustainability. It begins on page eight.
Along those lines, we get more specific on page 12 with a discussion of green purchasing and sustainability. On one side of the coin sustainability bears the imprint “reduce, conserve and preserve.” On the other side is the purchasing reward of reduced costs and increased profits. Author Robert Menard says, “the very acts of cutting costs and saving money are intrinsic to and integrally inseparable from sustainability.”
As I noted at the top of this column—and you’re well aware—it’s holiday time. On page 26, Associate Editor Natalia Kosk takes a look at how retailers are managing their sales as more consumers opt for online shopping vs. on-site retail shopping. She’ll explain how traditional supply chain practices must be altered to accommodate the consumer shift to online purchases.
Please enjoy the issue and have a safe, wonderful and green holiday season.