Hurricane Sandy, New Jersey ports and retail supply chain impact

An article in the Wall Street Journal (November 3, 2012) describes power supply issues at the ports in New Jersey causing diversions of inbound ships to Norfolk and other locations. But shipping to Dubai from New York costs $ 3000 a container, while sending it by truck top Norfolk adds around $ 2000 to costs, thus making this new path significantly more expensive. The hurricane’s impact is expected to add 10 to 14 days to the delivery lead time if ports in New Jersey get back to normal quickly. But pressure is building on retailers who want their shelves stocked with imports in time for the holidays. Should we expect retail price increases to cover this additional transport cost and supply difficulties ? Can a closer link between supplies to stores and observed demand enable retailers to maintain service level albeit with higher coordination costs ? Is this an opportunity to move some assembly closer to demand ?

About aviyer2010

This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , , , , , . Bookmark the permalink.

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