Hurricane Season
Powerful Storm Beryl Hits Region
Hurricane Beryl, an unusually strong storm for this early in the season, disrupted the apparel supply chain in the United States. While Beryl has weakened, experts warn this could be a sign of a more active hurricane season overall.
Beryl in Historical Context
Hurricane Beryl become a Category 5 storm on 1 July made it the earliest on record to ever reach that level in the Atlantic basin.
While attributing specific storms to climate change is complex, exceptionally high sea surface temperatures in the Atlantic Ocean are seen as a key factor in why Beryl became so powerful.
This came from experts at the National Oceanic and Atmospheric Administration (NOAA) who predict an 85% chance the 2024 Atlantic hurricane season will be “above normal”.
NOAA is forecasting a range of 4 to 7 major hurricanes within category 3, 4 or 5. Weather forecaster AccuWeather (https://www.accuweather.com) estimates that Beryl's total damage and economic loss will be between $28bn to $32bn.
Impact of Beryl
The storm caused temporary shutdowns at major ports in Texas, leading to delays in shipping and impacting lead times for deliveries. This could have a ripple effect on retailers, particularly later in the season for those importing holiday merchandise.
Preparing for a Busy Season
Analysts advise apparel companies to build flexibility into their delivery schedules and develop contingency plans to navigate potential disruptions. Just-in-time supply chains may be difficult to maintain during hurricane season, so having a recovery plan and a buffer on your ship dates is crucial.
Nearing Sourcing as a Strategy
Some suggest that sourcing apparel from closer locations, like Mexico or Central America, could provide more resilience against hurricane disruptions. This approach would benefit from shorter lead times and more adaptable delivery chains.
Long-Term Considerations
While a single hurricane may not cause significant damage, the potential for more frequent storms could lead to rising insurance costs and prompt retailers to explore alternative sourcing locations. Ultimately, a diversified approach to sourcing with geographically close options appears to be a practical strategy.
Haiti Apparel Industry and Hurricane Season
Haiti, a major apparel supplier to the US, was fortunately spared from Beryl's direct impact. However, its location and reliance on apparel manufacturing make it vulnerable to future storms. The country's ongoing political and economic challenges further complicate preparedness efforts. The renewal of trade agreements like HOPE/HELP, which grants duty-free access for Haitian apparel exports, is critical for Haiti's apparel sector.
Guatemala Apparel Industry and Hurricane Season
In general, due to the location of the industry within the country hurricanes are not a huge risk factor to the actual manufacturing.
The rainy season (June-Sept) can cause some washed out roads which result in a day or 2 day of lost productivity.
Best Practice Recommendation
Have a 1-2 week buffer in case there is a hurricane in the Atlantic Basis as the port of exit or port of US entry can close and the steamships can experience delays if there is a hurricane in the region.