When it Rains on the Supply Chain
Posted on Tue, Aug 10, 2010 @ 12:58 PM
Supply chains are designed for efficiency, predictable timing, low costs, and reliability. A certain comfort level develops after years of working with vendors; lanes of service are honed and things seem to work with only a few wrinkles. Then it rains. Rains like Hurricane Alex rained as it cut its path out of the Gulf and across Northern Mexico.
Hurricane Alex hit land June 30th as a category 2 Hurricane with winds of 105 mph and began pouring its heavy rain as it began to move across Northern Mexico. The flooding was extensive in the Eastern states of Tamaulipas, Nuevo Leon and into Coahuila. The subsequent flooding wreaked havoc on the railway and roads in many regions. This area of Mexico holds many of the Maquiladora industries and is the gateway to much of the industry in Mexico and from there into the United States.
Because of damage to rails and infrastructure caused by Alex, all of the railroads have embargoed rail crossing at Brownsville, TX; Laredo, TX and only and interchanges with the KCSM. (They had embargoed crossing to the FXE at Eagle Pass but partially lifted that restriction on July 8th.) The US railroads are sending crews and equipment to aid in the repairs but the damage is extensive. Cargo cars are backed-up and sidetracked far from the border and it will take several weeks to sort them out even after the crossings open again. Transportation and Logistics departments are scrambling to find ways to deliver their freight through alternate routes (some limited road access is still available). The railroads are working with customers to the extent they can, but when cars are blocked into yards with a hundreds of others, it can be hard to dig out a specific car for delivery.
After a disaster every company evaluates their emergency plans, and asks themselves if it is adequate. Hurricane Alex has proven to be no exception. Needless to say, these past weeks have been busy times for us logisticians. It serves as a reminder that despite all the best spreadsheets, flow-plans, and lean manufacturing practices, sometimes it rains, a cautious reminder that optimum planning should always remember that nature doesn’t pay attention to our flow-plans.
Written by Steve Klok, ADS Logistics.