It has been a very rough year already for transportation. First we had the floods in the Midwest that shut down rail, highway and barge traffic. Then the oil spill near New Orleans that ground Mississippi freight to a halt. And now, hurricane season is upon us with storms threatening U.S. coasts. There’s still a great deal of time for more natural and man-made disasters to wreak havoc on our transportation infrastructure this year. So the big question is, what do you do when a port, hub or major route goes down? Do you have a plan B, C and D to ensure you ‘just in time shipping’ supply chain doesn’t drive your costs through the roof while your machines and labor wait on parts?

If you don’t have a back up plan, now is (well past) the time to create one. Most businesses simply can’t afford lengthy delays. But you’ll minimize the risks to your company if you:

• Get proactive, rather than reactive - If you’re creating a contingency plan when a storm or longshoremen strike is imminent, it’s too late. Few options will be on the table as the procrastinators all scramble. Since you can always be certain there will be events beyond your control in the next few months, it’s certainly worth preparing for them ahead of time.
• Do the math - Floods in the Midwest forced shippers to use more expensive modes of transportation. Modeling costs to determine when it’s wise to pay the premium or wait it out will help you make critical decisions quickly. There are almost always options - the question is whether or not they are worth the added cost.
• Beware the Bullwhip Effect - As we all know, one thing now can have huge impacts down the road. So understanding the inherent inputs, cost drivers, and risks to your supply chain will help you cope with disruptions so they don’t reverberate across your materials, production, distribution, and customers.
• Have a game plan for natural disasters - Obviously, each and every event will be different. But having a plan and an established decision making chain of command will go a long way. The last thing you want is a “Heck of a job, Brownie” situation where everyone is hoping someone else will step in and sort things out.

No process you put in place can possibly prepare you for every challenge that can and will come up. But that’s no excuse for getting caught completely flat footed when disaster strikes the transportation network.

Rachel Rutkoski is a Category Manager for Transportation and Logistics in Ariba’s Global Services Organization. Rachel is recognized by the Institute for Supply Management as a Certified Purchasing Manager (C.P.M.) and has several years experience as a supply chain and transportation analyst in Fortune 500 companies.

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