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How Hard Did Hurricane Sandy Hit Manufacturers?


Manufacturing firms represent a sizable portion of the overall number of businesses that were forced to close due to the storm. An estimated 10,000 separate manufacturing facilities were directly affected by Hurricane Sandy, and each will face a long checklist of measures to clear before returning to full productivity.

For example, industrial companies will need to focus on having power restored, repairing structural damage to their facilities, draining flood water, clearing roadways, bringing phone and Internet services back online, testing and repairing equipment and removing debris.

“Unfortunately, due to little or no financial backing, many smaller local manufacturers may have to face the reality that their company may not recover for weeks, months, or even not at all. In a long-term sense, we will all see in the upcoming future the true impact of Hurricane Sandy when those decisions must take place,” Energy Curtailment Specialist warns. “When thinking in terms of the industrial supply chain of the country, there will be a great decrease in productivity across the country…Distributors and storage facilities away from the damage will need to react as well. Retailers may very well raise their prices (even if for the short term) to cover the extra transportation costs to and from operational distribution centers.”

Secondary and tertiary costs resulting from temporary closures or idling production capabilities are also likely to be a significant concern to businesses in a wide range of industries, as well as the general population.

“In addition to infrastructure damage, Sandy has forced the idling of about 70 percent of the East Coast’s oil refineries. This does not bode well for the supply of refined oil products, since capacity was already quite tight prior to the shutdowns,” IHS notes. “We are likely to see an accumulation of crude supply and a shortage of refined products in the coming days, which will inevitably put upward pressure on gasoline prices.”

How can manufacturers, especially smaller firms, prepare for a disaster like Hurricane Sandy and find ways to mitigate the risks associated with them? The U.S. Small Business Administration provides a helpful list of tips for hurricane preparedness:

  • Identify your greatest potential risks. Look at the building where you do business – inside and out – and assess the risks. If you do this early enough, you’ll have time to do structural upgrades – like impact-resistant doors and windows – that can prevent possible future storm damage.
  • Calculate the cost of business disruptions. What will the cost be for closing for a week, a month or six months? Once you’ve done that, you’ll be able investigate insurance options or build a cash reserve that will allow your company to function during the post-disaster recovery phase.
  • Review your insurance coverage. Contact your agent to find out if your policy is adequate for your needs. Consult with a business insurance expert to advise you on the right coverage for your situation. When buying insurance, ask “How much can I afford to lose?”
  • Implement a crisis communications plan. This will enable you to make sure your employees, customers, vendors and contractors know what’s going on. Also, establish an e-mail alert system, and make sure you have the primary and secondary e-mail addresses for your employees and everyone you do business with.
  • Consider a Telework Policy. Prepare for the possibility that employees won’t be able to get to the workplace by developing an emergency remote-work or work-from-home policy.

That’s it for today. Stay tuned for the next weeks post.

(For more than 10 years, GCP Industrial Products has successfully offered its customers a unique sourcing process that allows them to save money, streamline their supply chain and grow with new products. Our plans are to continue to grow based upon mutually beneficial relationships and the quality of our products and services to our ever growing customer base. To contact us please click here or phone 1-888-893-5427. Thank you.)