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Yusen Logistics

Stuck in a Snow Drift and No Where to Go
Ronald M. Marotta, Yusen Logistics (Americas) Inc.


This winter has surely been tough on all of us (except for those lucky enough to live in Southern Florida), but what impact does all this snow and ice have on your supply chain? "The weather does not have to be extreme in order to have a negative impact on cash flows. Sometimes it is merely enough for it to be uncommon, unseasonal or even unexpected," noted Karsten Berlage, global head of weather risk management at Allianz Risk Transfer (ART), one of Allianz's specialty divisions. The impact of our routine weather variation on the U.S. economy could total as much as $534 billion a year, Allianz's reported, in a piece entitled The Weather Business. For example, the cost of weather-related delays in the U.S. for airlines and trucking companies annually amounts to between $3 billion and $3.5 billion respectively, with related costs increasing significantly. There are estimates indicating that 30% of U.S. gross domestic product - some $5.7 trillion - is directly or indirectly affected by difficult weather occurrences and increased climate activity. Yet however "bad" the weather is, it "is no excuse for businesses incurring volatile revenues, higher costs or disappointing earnings," Berlange pointed out. "While companies cannot expect to control the weather they are now expected to better control the risk of its financial impact."1

We face challenges every day in making sure we all have a very resilient supply chain program to help us manage and thrive even when the unexpected occurs somewhere across our global supply chains. Normal winter weather, security threats, labor disruptions, traffic and other unforeseen issues are all things that we are trained to account for. Today we are seeing the impact of changing weather patterns that include a snowy and bitterly cold winter that will just not give up as one more issue that we need to think about as we plan out our resilient supply chain. The consideration of the impact to your supply chain of severe winter weather is vitally important as today's weather might be indicative of the weather changes we are facing for years to come.

 

Climate change is projected to increase the frequency and intensity of extreme weather events as we have been experiencing on a global basis of late and millions of us need to not look any further then out our front doors to see and feel the changes. Specifically, heat and cold waves will likely be more severe, the rise in sea level could increase storm surges in coastal areas that impact ports, tunnels, transportation infrastructure, and even airports on the Eastern seaboard. Storms will likely be more intense.2 These changes could increase the risk of delays, disruptions, damage, and failure across our land-based, air, and marine transportation systems. Most transportation infrastructure being built now is expected to last for 50 years or longer.3 Therefore, it is important to understand how future climate might affect these investments in the coming decades.

Climate change is projected to concentrate rainfall into more intense storms. Heavy rains may result in flooding, which could disrupt traffic, delay construction activities, and weaken or wash out the soil and culverts that support roads, tunnels, and bridges.2, 3 Exposure to flooding and extreme snow events also shortens the life expectancy of highways, railroad beds and roads. The stress of flowing water and heavy snow and ice with road salt may cause damage, requiring more frequent maintenance, repairs, and rebuilding. Road infrastructure in coastal areas is particularly sensitive to more frequent and permanent flooding from sea level rise and storm surges with salt water.

Approximately 60,000 miles of coastal roads in the United States are already exposed to flooding from coastal storms and high waves. Furthermore, major highways in coastal areas serve as critical evacuation routes. Evacuation routes must be protected from flooding and damage so they may be used for emergencies.3, 4 In some locations, warmer temperatures are projected to cause more winter precipitation to fall as rain instead of snow. Winter flooding could occur more frequently if the frozen ground cannot absorb precipitation. Landslides and wash-outs could also occur more frequently as saturated soils are exposed to more rainwater. Drought in areas such as the Southwest could increase the likelihood of wildfires that reduce visibility and threaten roads and infrastructure.2, 3

In the Gulf Coast, 2,400 miles of major roadway could be permanently flooded by sea level rise in the next 50 to 100 years. This map shows roadways at risk under relative sea level rise of about four feet - within the range of end-of-century projections for this region (under medium- and high-emissions scenarios). In total, 24% of interstate highway miles and 28% of secondary road miles in the Gulf Coast region are at elevations below 4 feet.


Source: USGCRP (2009)

Impacts on Ships and Sea Lanes
Marine vessels of all types are sensitive to many factors, including the depth of a shipping channel and the extent of coastal area icing and even sea ice in areas that are seeing increased and extended periods of colder weather. Some areas are seeing increasing temperatures that conversely could reduce the amount of sea ice in many other important shipping lanes, extending the shipping season. Warmer winters in these areas will likely lead to less snow and ice accumulation on vessels, decks, and rigging in marine transportation.

Shipping lanes experiencing sea level rise will be able to accommodate larger ships, reducing shipping costs. However, higher sea levels will mean lower clearance under waterway bridges. In inland waterways where water levels are expected to decline, as in the Great Lakes, ships could face weight restrictions as channels become too shallow.2, 3

Changes in precipitation can affect shipping in many ways. Flooding could close shipping channels and increased runoff from extreme precipitation events could cause silt and debris to build up, leading to shallower channels. Changes in precipitation patterns could also affect the rate at which sediments accumulate, which may also make existing channels shallower and less accessible. In areas experiencing increasing drought, water levels could periodically decrease, limiting inland shipping on rivers. More severe storms could increase disruptions in marine travel and shipping.2, 3

Impacts on Ports and Infrastructure
Like other coastal infrastructure, harbor facilities, including docks and bridges, may have to be raised to accommodate higher tides and storm surges as sea levels rise. We have seen on the East Coast this winter numerous days of ports closing due to snow falling, for snow removal, and even to allow terminal areas to clear up traffic that builds up due to restricted roads as a result of plowed snow blocking streets that feed into terminal areas. For example, in the Gulf Coast, which is home to seven of the ten largest ports in the United States, the combination of relative sea level rise and more intense hurricanes and tropical storms could lead to significant disruptions and damage. 2, 3

http://epa.gov/climatechange/impacts-adaptation/transportation.html


[1] https://www.allianz.com/v_1385454283000/media/press/document/2484_Allianz_Weather_Risk_LR.pdf

[2] USGCRP (2009). Global Climate Change Impacts in the United States. Karl, T.R., J.M. Melillo, and T.C. Peterson (eds.). United States Global Change Research Program. Cambridge University Press, New York, NY, USA.

[3] NRC (2008). The Potential Impacts of Climate Change on U.S. Transportation. Transportation Research Board Special Report 290. National Research Council (NRC).

[4] FHWA (2008). Highways in the Coastal Environment (2nd edition). Hydraulic Engineering Circular 25, NHI-07-096. Federal Highway Administration (FHWA).


Ronald M. Marotta is the Vice President of Yusen Logistics (Americas) Inc., International Division, an NYK Group Company, responsible for the Origin Cargo Management Group and is based in Secaucus, NJ. Ron also serves as the NYK Group's Commercial Council Office Leader and works with all NYK Group Companies in their efforts to collaborate and provide integrated global logistics services to our mutual customers. Ron began his career at NYK almost twenty years ago as the General Manager of OCS of America, Inc. and helped to transform one of the original consolidators in Asia, into a modern consolidator and cargo logistics company.

Over the past 19 years, Yusen Logistics has grown their international business over 1,100% and extended their service reach throughout the globe. Ron can be contacted at (201) 553-3803.

 
 
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