Nationwide shipment volumes fell 20% and on-time delivery (OTD) rates declined in mid-February when winter storms ravaged Texas and other parts of the South, underscoring the impact of the storms on already strained supply chains and a resulting need for greater supply chain visibility, according to recently released data from supply chain technology company FourKites.
Manufacturing, food and beverage, and pharmaceutical industries bore the brunt of the storms, the data show. During the week of February 14, FourKites' supply chain visibility platform saw total shipment volumes decline by 20% compared to the previous week, with manufacturing shipments falling by 31%, food and beverage by 23%, and pharmaceuticals by 19%.
The storms had a similar effect on OTD, with rates falling 32% overall during the storm week. The pharmaceutical industry was hardest hit by this measure, with OTD falling 36% the week of February 14 and dwell times on pharmaceutical shipments increasing 92% the week before the storms and more than 300% the week of the storms. FourKites called the dwell time increases unprecedented and well above average dwell times across all industries.
Overall though, the delays and disruptions mirror those seen in other natural disasters, said Glenn Koepke, senior vice president of customer success at FourKites. He said the company saw similar declines in OTD and overall shipments during last summer’s Hurricane Laura, which struck Louisiana in late August.
“Interestingly, for both storms, we saw a steep drop in LTL (less-than-truckload) and parcel shipments,” Koepke said. “In the case of Hurricane Laura, LTL shipment volume dropped by 36% from the previous week, and parcel shipments saw a 20% decline. Additionally, on-time delivery was most impacted for LTL and parcel shipments, registering a dip of 46% and 32%, respectively. We observed a similar trend in LTL and parcel on-time delivery during the snowstorm of February 2021. LTL and Parcel shipments both saw a 30% decline in on-time delivery during the storm week of February.”
Koepke emphasized planning and visibility as the keys to helping manage supply chain volatility.
“Retailers, manufacturers and suppliers have always had to manage wild, unexpected swings in demand because forecasting is an estimate based on the known or planned factors,” he said. “But long-term disruptions like Covid or weather-related shifts expose problems at a much broader level as leadership identifies gaps in knowledge. All of this has accelerated the demand for supply-chain visibility and the need to maximize agility.”
The February storms also took a toll on ports, shuttering activity at Port Houston for nearly a week. Earlier this month, officials at Port Houston reported a 13% decline in year-to-date container activity through February, citing the impact of the sub-freezing temperatures on port activities. Monthly volume took an even bigger hit: the port handled 198,763 twenty-foot equivalent units (TEUs) in February, down 22% compared to a year ago.