NORTH AMERICA - It’s no secret El Niño has been bringing a slew of storms to North America this year, and Mother Nature will likely have many more up her sleeve.
With the National Oceanic and Atmospheric Administration predicting this year’s El Niño among the strongest on record, those on the North American continent, and California in particular, will be dealing with conditions that may impact your business in more way than you might think.
How you’re affected depends on your specific supply chain, but C.H. Robinson’s Director of Air Freight Services, Matt Castle, shared on the company’s blog three possible areas your business might feel the pressure from El Niño.
To read the full blog post, click the green button below.
El Niño's Effects on the Supply Chain
1) Speed of Delivery
“While surfers rejoice because of the epic waves El Niño is bringing to California’s beaches, those same swells are magnified deeper at sea and could potentially cause problems for ocean vessels carrying your goods,” writes Castle.
The hazardous conditions El Niño may inflict would likely cause ocean liners to have to change their course and cause major delays. Even when your goods make it to port, you’re still potentially at risk for even more delays on stormy roads. These record amounts of rain California has been receiving can quickly wash away roads and railways.
2) Mode of Transportation
Another side-effect of El Niño weather effects is capacity shortages. Castle refers to what often happens during capacity shortages as, “a snowball effect.”
“From a domestic standpoint, if a mudslide or tornado wipes out the rail lines, then intermodal shipments are shifted to trucks,” Caste shares. “When truck capacity gets tight, shippers switch to less than truckload (LTL), and when that fails they move to air freight and charters.”
The same sentiment applies to global shipping. When ocean shipments are hit with delay after delay, shippers will switch to air shipping keep inventories in stock and shelves full.
3) Budget
As you might guess, both delays and capacity constraints will take a few chunks out of a business’s transportation budget. Worst case scenario, multiple shipments may need to be switched from via ocean to air at the last minute to avoid empty shelves. Or even worse, your carriers may start rejecting shipments for more profitable loads, Castle suggests.
“Your transportation budget starts to break down,” Castle explains. “The longer these conditions last, the tougher it can be to maintain your budget.”
So now that you know some of your risks, what can you do to make sure you’re ready for whatever El Niño throws your way?
“When market-changing events that are out of your control occur—like El Niño, winter weather, or a port strike—it’s easy to feel as though there’s nothing you can do to help protect your supply chain,” Castle writes on C.H. Robinson’s blog. “The key to riding out a situation like El Niño is to have a supply chain that is flexible enough to adapt.”
Castle suggests an efficient and accurate inventory process. You need to know what products need to be air shipped and what can wait the extra week to arrive via ocean. Use real time tracking and tracing capabilities to see delays as they occur (sometimes before), and schedule an extra LTL shipment to keep shelves stocked for another week.
When you know what you’re dealing with ahead of time, you may even set yourself up as a favored shipper with carriers and possibly better acceptance rates. Castle says all of this is possible when you have a logistics provider who has the industry knowledge, carrier relationships, and advanced technology to get the job done.
To read Castle’s entire blog post, visit C.H. Robinson’s blog here, and for continued updates on how El Niño may affect you, keep watching AndNowUKnow.
