Sandy Slows Deliveries, Cripples Supply Chains


by | Nov 5, 2012

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Companies from Amazon to railroad firm CSX are warning customers to expect delays on shipments as Hurricane Sandy continues to back up supply chains and slow deliveries leading into the holiday season.

CSX told its customers to expect delays of at least 72 hours as trains in the Northeast continue operating slowly because of power outages.

Carrier delays would likely slow Amazon orders, the online shopping giant posted, and Better World Books said there may be a delay of five to 10 business days on orders shipped to the eastern United States, the Ohio Valley, Canada and western Europe.

The two join a host of other retailers such as Diane von Furstenberg that have told customers that closed shipping facilities, slowed transportation and massive power outage will mean longer waits on deliveries, the New York Times reports.

At REI’s SoHo store in New York, employees wearing headlamps and carrying flashlights led customers around in the dark after losing power on Oct. 29. Even after the power was restored Nov. 2, employees had to manually count and order merchandise, according to the Times.

The newspaper also reports FedEx rented fuel tankers to supply its delivery trucks after commercial gas stations ran out of gas, and trucking company Ryder has rented extra trucks to increase its capacity.

Grocery stores are also hurting because long delays in meat, produce and other perishable goods can spoil the products.

Despite the trucking industry suffering Sandy-related losses of $140 million per day, Freight Transportation Research Associates senior consultant Noel Perry says the sector will recoup its losses, because of associated resupply and rebuilding truck freight demands. Perry’s per-day estimate of lost revenue is based on 20 percent of the industry not moving freight because of the storm and its aftermath.

Some economists say Sandy could cost up to $45 billion in damages and lost production, with the losses from closed businesses and drops in consumption possibly outweighing the cost of physical damage.

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