Supply chains rely on critical infrastructure such as power, communication, transportation facilities (e.g., roads, airports, ports)—all of which can be damaged and disrupted during a disaster. The magnitude of damage, and how quickly the system can recover from damage, depends on the resilience of the infrastructure; and the status of the infrastructure, in turn, can profoundly affect supply and demand (and ability of supply chains to meet the demand) for many critical products and services.

Understanding how interdependencies among critical systems can lead to cascading failures aids in emergency preparedness and supports risk management decision making when responding to events. Many critical supply chains are dependent upon the functioning of critical infrastructure such as energy supply (electricity, fuels), and in turn the energy sector is often dependent on the functioning of communications, water, and transportation systems. A widespread power outage—especially if it lasts for an extended period—is likely to impact the communications network, the water network, and critical supply chains for fuel, food, and other critical supplies.

Hurricanes Irma and Maria caused almost complete disruption to the Virgin Islands’ power systems. In many places, power outages lasted for more than four months, with many cascading impacts on the ability to resume normal commercial and other operations across the island. While wind and solar power generation survived, many places relied on the electric power grid. They were equipped with back-up generators, but many of these eventually failed because they were not designed to run continuously for months - obtaining generator fuel over this extended time was also a challenge.

Some grocery stores were open with items on the shelves but they were not able to execute EBT card transactions due to power outages or disruptions in communication towers. Deliveries from distribution centers to grocery stores were also disrupted due to road conditions or shortages of truck drivers.

The United States regularly experiences shortages of some lifesaving drugs and other supplies essential to patient care. Saline is one example, as it is required for the majority of hospitalized patients, with national demand of more than 40 million bags per month. One of the main producers of saline, supplying about half of U.S. hospitals with small saline bags, is Baxter International, located in Puerto Rico. There was already a shortage of saline solution prior to Hurricane Maria, and the impact of the hurricane on the Baxter plant caused the problem to reach critical levels. The lack of redundancy in overall manufacturing capacity makes this a highly vulnerable supply.

Criticality of a network node, link, or other component measures the extent to which a disruption of the component will degrade the functionality of the network (which could be measured as the on-time delivery of supply to the end customer).

• In places where state and local governments invested in reducing the vulnerabilities of critical infrastructure (especially for hardening electric power systems), this did yield benefits in terms of minimizing storm disruptions and thus bolstering the speed with which local economies could resume normal operations. Where these sorts of investments did not occur, more severe disruptions arose.
• The ability of emergency managers to understand post-storm supply chain bottlenecks was constrained by limited pre-storm assessment of vulnerable and critical supply chain nodes, together with information disruptions resulting from power and communication loss.

Vulnerability measures the likelihood that a node or link will be disrupted. For example, a production facility in a hurricane-prone region is more vulnerable than one that is not in a hurricane-prone region; and facility with sophisticated fire protection is less vulnerable than one without. The goal is not to insist on accurate estimates of failure probabilities, but instead to call out nodes and links with significant risk of being disrupted.

• Vulnerable infrastructure, especially for power and communications, is a predictable vulnerability, and the speed with which supply chains can recover often heavily depends on the resilience of this infrastructure. In places where there was investment in reducing vulnerabilities (especially for hardening electric power systems), benefits are seen in terms of minimizing storm disruptions and thus bolstering the speed with which local economies could resume normal operations.

To assess the vulnerability of supply chain nodes and links to disruption from natural hazards requires an understanding of the natural hazard events that may affect a location, and the probability of such events.

Resources from other National Academies work provide examples for identifying and characterizing hazards and hazard probability to inform risk assessment:

• Flood Resilience: Preparedness and Recovery
• Emergency Preparedness/Disaster Management

Over the past decade, business continuity planning has expanded significantly, particularly in advance of hurricane season, because of growing pressure for companies to recover quickly (often within hours) after a storm hits and to maintain significant capabilities during disaster conditions.

Plans should consider how to manage resources by understanding and taking inventory of critical business functions, sites, materials, and equipment needed for response and recovery operations. This may include consideration of factors such as transportation and communication equipment, off-site back-up locations and capabilities, maintaining adequate supplies of essential materials, and developing robust contracts with suppliers who can respond quickly during an emergency and enable continuity of operations.

Caribbean Restaurants, operator of more than 170 Burger King locations across Puerto Rico, was well equipped to handle problems after Hurricane Maria—because they had inventories, communications systems, and workers ready to respond. They were able to rely on an experienced network of drivers and an internal fleet of 25 trucks to deliver product to its stores. They also benefited from a company-owned 10-day supply of diesel, supplemented with fuel shipments from longtime supplier Empire Gas—which in turn had its own distribution channels, containers, and fleet of trucks to distribute gas across 40 different stations throughout the island.

Fuel Supply Contingencies: Contracts and Agreements

A key priority of preparedness in the aftermath of major storms is ensuring the availability of fuel for response, restoration, and recovery activities. Depending on market conditions, fuel inventories may be low and prices high as demand for tight supplies increases.

During a shortage, customers with contracts or agreements via a primary fuel supplier are typically served first. During tight fuel markets, customers with contractual agreements may be given priority to purchase an allotted level of fuel based on previous historical purchases at their fuel supply facility or terminal. When feasible, establishing firm contractual agreements is a good option for ensuring that companies and organizations are prepared for the next major event.

Communication Protocols and “Work-Around” Systems

Effective communications among governments, private, and public entities are necessary in preparing, responding, and recovering from an emergency situation. Communication mechanisms and equipment should be deployed with appropriate back-up plans to agencies and organizations involved. Comprehensive communication systems, including the use of translators when necessary, should be in place to supplement any communications that may be lost in the event of a power outage. Communications equipment should be thoroughly tested, and responders should become familiar with the equipment, systems, and procedures during training and exercises.

After Hurricane Maria, more than 95 percent of cell signal towers in Puerto Rico were out of service (FCC, 2018), and emergency management officials reported how their staff operated “blindly” for a number of days and thus were not able to adequately respond due to lack of communications.

During Hurricane Maria, the collapse of power and communication infrastructure across Puerto Rico created a host of cascading effects on supply chain dynamics. Many truck drivers could not be reached due to non-functioning communications networks, and this became one of the factors causing a shortage of truck capacity and thus delaying delivery of critical goods. Without power and communication, retailers could not place orders with distributors, distributors could not place orders with suppliers, and orders could not be delivered due in part to the inability to mobilize trucks and drivers.

Plans to Protect Health and Safety of Organizational Personnel

During a disaster, government and industry may experience a loss or shortage of human resources to perform critical jobs and provide adequate contingencies. Businesses should maintain lists of full contact information for all employees and ensure that lists are updated frequently and maintained at multiple locations. Preparedness plans should address relocation or return of evacuated employees to the region. Housing resources need to be identified for employees and their families. Safety and security requirements, including protocols for re-entry credentials, must be assessed and addressed prior to returning evacuated employees or deploying replacement employees.

• Florida: Some gas stations did not operate at capacity even though they had inventory of fuel, because people were not available to staff the stores. So, even though there was supply, human resource limitations or disruptions in the infrastructure led to a mismatch between demand and supply.
• Puerto Rico: Crowley Maritime housed and fed employees and their families at the Port of San Juan to ensure the availability of workers to continue operations.
• Texas: In Houston, it was reported that one large electric utility (CenterPoint) set up childcare services for its employees who responded to Hurricane Maria.

Training and Worst-case Scenario Drills for Preparedness, Response, and Recovery Operations

Training programs provide a necessary step in preparing for disaster incidents. In addition to training, personnel should exercise plans to test and evaluate roles and responsibilities, procedures, communications, equipment, etc. Lessons learned and best practices that were observed during exercises can then be used to update existing plans to make them more robust. Federal, state, and local governments and the private sector sometimes conduct exercises and workshops to prepare for disaster incidents.

In June 2017, two months before Hurricane Harvey, Texas State Emergency Management conducted an exercise to test the state’s hurricane preparedness program. The scenario was a major Category 4 hurricane to make landfall in the Houston-Galveston-Sabine Lake region. More than 1,100 participants took part over the nine-day event.

Some key steps and strategies to advance this recommendation are to

• Provide all stakeholders engaged in emergency management of disasters with at least a base level of training about supply chain dynamics, and provide senior decision makers, elected officials, and governmental financial officers with advanced training that focuses on the economic impacts of disasters—all phases, not just recovery.
• Provide private and nonprofit entities access to training that fosters understanding of needs and opportunities to engage with government organizations in disaster preparation and response.
• Advance development of processes, data, and models to support decision making related to supply chains during disaster operations.

The 2017 hurricanes offered numerous examples of challenges in the prioritization of scarce resources and the cascading impacts of infrastructure failures or resource allocation decisions.

Decisions about the allocation of scarce resources are critical during disaster response, and these decisions can have complex cascading effects on other resources and on the ability to meet demand for certain commodities within an affected community. For example, allocating the limited truck capacity to delivering critical food and medical items may save or improve lives; yet allocating some of that capacity for carrying repair supplies to fix critical infrastructure (e.g., roads, electricity) might also save lives, especially if this means establishing connectivity to critical facilities and services such as hospitals and dialysis centers. The impacts of allocation decisions can reach well beyond local communities as well.

Action to implement:

Prioritize recovery of infrastructure critical for resuming normal supply chain operations over delivery of materials. Critical infrastructure (e.g., power, telecommunications, transportation, roads, bridges, water) enables the operations of all supply chains. In most cases examined in this study, adequate supplies of materials existed in the areas affected by disasters, but the ability to ship and deliver those supplies was impeded by lack of roads, trucks, drivers, fuel, or electricity. Repair and rebuilding of damaged infrastructure is not currently seen as FEMA’s direct role, but the agency could be well positioned to take a more active leadership role in aiding such efforts.

Over the decade preceding Hurricane Irma, Florida had invested in upgrading power systems infrastructure and deploying smart grid technologies that provided timelier, more accurate information about outages.

Some fuel distribution problems arose, in part because fuel racks were not powered for a period of time and the USVI has no requirements that retail gas stations have generators or are generator-ready.

As part of a strategic shift toward greater focus on restoration of pre-disaster supply chains, FEMA could aid and advise the information gathering and analysis needed to identify priorities for restoration of critical infrastructure in an affected area (e.g., a manufacturing plant that is critical for a national supply chain may not normally be on the state or local emergency management radar for priority assistance.)

The work of creating a resilient supply chain does of course have costs, but these costs are likely to be far outweighed by the benefits of equipping emergency managers with better understanding of supply chain vulnerabilities, with visibility into the causes of demand and supply gaps, and with a stronger foundation to make effective decisions about how, when, and where to deploy critical resources during emergency preparedness and response operations.

As more general illustrative guidance, please explore examples of tools from the full report that are already being developed and applied in a variety of disaster and hazard management contexts.