Here it comes. Up to two-thirds of the US is facing down the threat of serious snow, cold, and ice this weekend, with the potential to snarl roads (and the businesses that depend on them) from Texas up to New York City. At this point, grocery stores, logistics experts, warehouse operators, and trucking companies have been prepping for days. Still, the effects on the supply chain—and the retail store shelves that depend on them—are yet to be determined.
On one hand, this is winter business as usual. Snowstorms happen every year, and the freight industry has a playbook.
“If you’re a retailer, this happens all the time,” says Chris Caplice, the chief scientist at the transportation management firm DAT Freight & Analytics. “For people in the supply chain, this is just another Tuesday.”
On the other hand, the places where this storm is happening, and its breadth, pose an extra challenge.
“This one’s kinda tough, because you don’t have a lot of snow storms hitting the states that this one is hitting,” says Chris Long, the executive vice president of operations at Capstone Logistics, a third-party logistics firm. Affected southern states, including Texas, Oklahoma, and Arkansas, are often equipped to handle hurricanes, with networks of distribution centers set up to disburse what’s often needed after that sort of storm: generators, water, plywood. But if roads in those states, less equipped for cold, freeze over for several days—“the worst-case scenario,” Long says—buyers might see shortages of some perishable items, including food and pharmaceuticals.
To prevent that, retailers have spent the last few days positioning specific inventory they know customers will want—say, snow shovels, bottled water, canned goods, de-icer—in local distribution warehouses, where it can quickly get to store shelves. Large trucking companies have situated their vehicles and staff where they’ll likely be needed; independent truckers have likely vacated the road.
Next week, as everyone digs or thaws out of whatever the storm has wrought, freight prices will likely spike, says Caplice, as freight companies try to get the supply chain chugging again. But this sort of shock is likely priced into retailers’ businesses—it’s winter, after all—and won’t affect the prices customers see at checkout. This year, uncertainty in the freight industry around tariffs and immigration is a much bigger deal, he says. “This will be a blip.”
Whatever the next few days bring, companies are likely better equipped to respond than they were before the pandemic, when lockdowns sent global supply chains into turmoil. “When I first got into the industry it was all about ‘just-in-time,’” says Long, who worked for years in the grocery industry. The pandemic made retailers, and the freight businesses supporting them, more focused on stocking up to survive the unexpected. “We’re in a way better place,” he says.
Source: www.wired.com
