Did Hurricane Sandy Ruin Christmas for Some Businesses?

The impact of Hurricane Sandy is being felt in areas where the super storm never reached. The hurricane shut down shipping terminals, warehouses and distribution centers across the Northeast. Additionally, it created gasoline shortages and closed roads which slowed down deliveries. All of this adds up to a delayed supply chain, right as the holidays approach, a time when most businesses rely on sales to help turn a profit for the year. The impact of these delays could be great, as the northeast corridor is responsible for $3 trillion in output, about 20% of the gross domestic product, according to industry experts.

This supply chain slowdown is affecting businesses both big and small. FedEx has been forced to rent fuel tankers to supply its trucks as commercial gas stations run dry. The Port Authority of New York and New Jersey reported that all of its major marine terminals were shut down by the storm. While these terminals have reopened, delays endure.

“We are now coming into the cutoff for seasonal orders for the Thanksgiving and Christmas holidays,” said Paul Tsui, chairman of the Hong Kong Association of Freight Forwarding and Logistics. Companies that miss shipment deadlines have three options:  send their products via air freight which is more expensive, pay a penalty to retailers for late shipments or face canceled orders.

Smaller businesses with smaller budgets and profit margins are being hit particularly hard by these supply chain slowdowns.

Robert Van Sickle, owner of a pet supply company, was relying on a shipment of cardboard tubes from China with a holiday design intended to hold very popular holiday dog treats. The terminal his shipment was delivered to was located in Staten Island, a section of New York that was devastated by Hurricane Sandy. The containers were lost and it’s now too late to reorder the tubs from China in time for the holidays. Mr. Van Sickle is now stuck with tens of thousands of dog treats inside his headquarters. While insurance will cover the cost of the lost cardboard tubes, it will not cover the finished products or lost revenue.

“Without this product, we’re in trouble,” he said. “I am a business owner and this is pretty much my year.”