You Thought Superstorm Sandy Was Bad? We Could Well Be Facing a Superstorm of Risk
In 2012, Hurricane Sandy impacted communities from Jamaica to Quebec, resulting in over 70 billion dollars in damage and 147 fatalities.
As the storm approached New York and New Jersey, unusual meteorological conditions led to the formation of Superstorm Sandy, an extratropical cyclone.
At the same time, the Atlantic Ocean was at high tide. On the night of landfall in New York City, there was a full moon, which brought the tide levels even higher.
This rare set of circumstances amplified the impact of the storm in New York City, boosting the damage caused by storm surge and related flooding.
This confluence of events is an interesting parallel to the global conditions and challenges we are facing as we approach the 2021 hurricane season. It is clear that the pandemic has changed the way we live and how we do business.
As public health agencies continue to battle COVID-19 around the world, the recovery and restart is revealing new challenges. Sudden and sharp demand for raw materials, such as lumber, chemicals, and plastics, as well as workforce shortages are challenging even the most resilient organizations.
This fragile operating environment combined with the current weather atmosphere could result in a superstorm of risk. Therefore, it is important to take a close look at the impact of how hurricane preparedness and response plans might need to shift as a result.
For decades, hurricane preparedness has focused primarily on traditionally vulnerable coastal areas in the path of hurricane destruction.
Businesses that operated, stockpiled supplies, and employed a workforce in those areas annually dusted off their preparation plans and hunkered down, ready to face the anticipated impacts from these wildly forceful storms.
Many key factors, such as the potential for coastal storm surge, projected wind speeds, employee safety, localized flooding, as well as the ability of local and state governments and organizations to respond to the damage a hurricane inflicts were taken into consideration.
While many protocols and business practices changed this past year due to COVID-19, our vulnerability has shifted too.
It is not just about geography anymore. Whether coastal or inland, it is clear that recent operational changes have increased the vulnerability and potential damage businesses may face during the hurricane season.
In 2021, companies are finding themselves slightly altered, perhaps permanently, due to the COVID-19 pandemic. In some instances, these changes are escalating their risk exposure before, during and after a hurricane:
- Supply chain: Some companies that operate and/or source globally are facing raw material and parts shortages, shipping delays and other supply chain bottlenecks that are impacting businesses throughout the globe. Companies may experience further disruption if and when the U.S. is impacted by one or more major storms during the 2021 hurricane season.
- Increasing inventory: Many businesses are changing their approach to inventory, now stockpiling additional inventory on-site to shield against future shortages that could disrupt their ability to generate revenue. This added inventory, if properly allocated and kept out of harm’s way, may impact recovery in a positive way. Conversely, if these increased inventories are exposed to the path of an oncoming storm, not only could it increase the potential loss at an exposed location, it may also have downstream impacts on interconnected facilities as well. This could lead to more challenging and protracted recovery periods for the business overall.
- Idle and vacant facilities: With many employees continuing to work remotely, this also means fewer employees are working in company locations, making many buildings sparsely occupied or even idle and vacant. As we saw in 2020, idle and vacant facilities are at greater risk for storm related damage, especially if incident response and hurricane preparedness plans have not been updated to reflect these new workplace realities.
- Technology and Infrastructure: The ability to support remote employees necessitates a reliance on more technology than ever before, but it also requires consideration for infrastructure beyond just company locations. Downed power lines or a disruption in connectivity during or after a windstorm is a common occurrence.
In the 2021 hurricane season, it is important to consider how that would impact not just facilities but also the locations where critical remote employees are operating from.
It is also important to consider information technology and telecommunications assets that support remote workers globally, as disruption to this equipment could have a greater impact than it would have had in years past.
While a company might not be traditionally considered vulnerable to hurricanes, it is crucial for business leaders to reflect on the changes in the past year and determine if their business has a greater risk in 2021.
Tapping into insurance and resilience professionals as well as weather and engineering experts can be a first step in re-examining a company’s risk profile.
Now is the time for business leaders to protect their workforce and operations from the impacts and losses related to these extreme weather incidents – it all lies within preparation, a process, that like risk itself, is always evolving. &