Cold Weather Offers Lessons on Supply Chain Risks and Climate Change

With nature dealing much of the U.S. an arctic blast of cold weather this week, it’s a good time to look at the supply chain risks created by severe weather and climate change.

The distinction is that weather consists of the day-to-day events, like high and low temperatures, rain or drought that can fluctuate wildly. And climate is the long-term weather pattern for a particular region. When there’s climate change, a long-term pattern is altered and can affect the daily weather in different areas. So global warming can heat large areas of Earth, causing wild swings in hot as well as cold temperatures in areas that once had a more consistent climate.

In this current cold snap, one weather-related disruption that many will experience is that businesses, like schools, will close. Long-haul trucking and last-mile delivery can face road closures and dangerous conditions from blowing snow and high winds. And even airports struggle to operate smoothly despite de-icing systems and advanced forecasting technology.

Riskmethods General Manager for North America Bill DeMartino said that every year supply chains seem unprepared to deal with some aspect of winter weather. It doesn’t have to be like this anymore, he said.

"Modern technology not only mitigates the effects of extreme weather on supply chains — it can help predict it so that you can take steps to avoid being impacted in the first place," DeMartino said.

Here are Riskmethods' top tips for dealing with extreme weather events:

1. Make sure your key suppliers, manufacturing locations, ports and supply paths are all pinned on a world map, so you can quickly visualize your supply chain.
2. Set up a system to receive alerts about when an extreme weather event is likely to impact one of those suppliers, locations, ports or paths. (Hint: You’re probably going to need AI to do this truly effectively!)
3. Build action plans so you know exactly what to do when an extreme weather event is about to take place.
"You can’t stop winter," DeMartino said. "But you can make your life easier by making sure it doesn’t impact your supply chain."

The Indiana-based logistics management firm TOC Logistics International has four tips for dealing with the cold to ensure “overall supply chain success.”

1. Monitor the Weather: “Winter storms are often unpredictable, but being able to quickly, and efficiently, find new solutions and shipping routes for your clients is extremely valuable.”

2. Manage Your Time: “Make sure you are managing shipping time expectations with your clients and take into account any delays that could arise because of bad weather.”

3. Protect Your Freight: “If you are shipping any products that can be sensitive to the cold, such as perishables, chemicals, and paints, remember that many modes of transportation will not provide protection from freezing temperatures.”

4. Communicate: “Be sure to have clear lines of communication open for all employees, as your team will need to make quick decisions if bad weather arises.”

California-based Resilinc, which assesses supply chain risks, consults on the range of disruptions that can affect businesses. In the short term, it has this advice:

 Bad weather tests the agility and resiliency of even the best supply chains. However, companies that manage weather-related disruptions as part of their event-monitoring best practices and supply chain risk management strategies tend to fare better than those that don’t take preventative measures, Resilinc’s work with customers shows.”

In the long term, risks like climate change need to be addressed because it can lead to major shifts like rising sea levels. This month, Spend Matters’ sister site MetalMiner looked at supply chains and climate change.

The story quoted the recent National Climate Assessment report, which said this:

“A reliable, safe and efficient U.S. transportation system is at risk from increases in heavy precipitation, coastal flooding, heat, wildfires and other extreme events, as well as changes to average temperature,” the National Climate Assessment states. “Throughout this century, climate change will continue to pose a risk to U.S. transportation infrastructure, with regional differences.”

For the full MetalMiner story read: “Measuring Risk in the World of Climate Change.”

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