Hurricane preparedness in five easy steps.
By Ryan Mossman, vice president and general manager of FuelQuest’s Fuel Services.
Earlier this year, forecasters with the National Hurricane Center announced an “above average” hurricane season for 2013. Eighteen tropical storms, nine of which will be hurricanes, are on the horizon. Even more concerning, there is a 72% chance that one of these mega-storms will hit the U.S. For fuel retailers and distributors, this forecast provides early warning of potential disruptions to fuel operations from weather.
Let’s look back at last year’s major storm: Hurricane Sandy. Even before Sandy came ashore, fuel demand in the Mid-Atlantic and New England region skyrocketed as fearful residents rushed to fill up their gas tanks, causing runouts throughout the area. Compounding the situation were highway closures that cut off last minute fuel deliveries limiting the availability of supply to the fuel stations desperately in need of replenishment. After the storm, supply issues worsened due to storm-inflicted power disruptions at the refineries, terminals, and pipelines. While some fuel deliveries were being made, the lack of electricity at retail stations did not allow fuel to be pumped from the underground tank to consumer’s vehicles. Adding to the problems, flooding at some convenience stores contaminated these fuel tanks rendering them useless.
As we saw with Hurricane Sandy, when 28% of gas stations did not have fuel a full week after the storm had passed, hurricanes can wreak havoc on even the best-laid replenishment plans and fuel operations. However, a little advanced planning and communication will go a long way toward managing the negative impacts of these storms. As fuel managers prepare for the season’s first big storm, here are five simple steps you should take in developing your disaster preparedness plan:
Top off tanks before the storm arrives to reduce runouts. Abandon “just in time” strategies at stations and raise inventories prior to a storm. Secure secondary and tertiary supply options early with fuel providers and schedule multiple deliveries in advance before inventories dwindle. Consider back-up generators to maintain operations in the case of power outages. Refrigerated food spoilage is an expensive lesson that can be avoided with backup power. Remember to take into account the fuel needs of these generators and other emergency backup systems. Implement a comprehensive supply portfolio year round, so that you can leverage it during a storm. Waiting to address your supply partners until a storm will severely limit your options.
Establish a good communication network with local government and emergency management officials. Know what officials are saying. If they recommend consumers fill their gas tanks, this could mean a run on a fuel and shortages for locations along access routes within your operation. When possible, pre-plan for fuel emergency preparedness in coordination with your supply team or your fuel suppliers and carriers. Aspects of your plan should include communications, up to date information about traffic, flooding, and every store’s inventory levels and runout dates.
Flooding causes many problems including equipment failure and product contamination. Wetstock analytics identify faulty equipment and water contamination, before they become a problem, preventing costly fines.
Ensure that you remain compliant with state anti-gouging laws. By doing so, you will protect yourself from paying thousands of dollars in fines but and also de-risk losing your regular customer base. Keep in mind that if your prices are significantly higher than your competition’s, your loyal customers might not return once the storm has passed.
For retailers optimizing inventories, delivery schedules, or pricing by using fuel management solutions, most dashboards will offer multiple opportunities to adjust to potential supply disruptions and demand spikes. The continuous overlay of near real-time fuel information on solutions built around industry best-practices enables retailers to stay on top of any rapidly changing situation.
Hurricanes may only happen a few times a year, but as Hurricane Sandy demonstrated so dramatically in 2012, they can be absolutely crippling to fuel retailers. And while this season’s stormy forecast does seem rather ominous, it doesn’t have to mean doomsday for fuel retailers and their operations. Preparedness and communication are the keys to maintaining both supply and operational retail sites before and after the storm passes.
About Ryan Mossman
Ryan Mossman, vice president and general manager of FuelQuest’s Fuel Services, leverages his years of experience applying technology and business process improvements to help energy, retail, commercial and industrial clients… In addition to overseeing a team that manages $2.4 billion in fuel, Ryan’s FuelQuest experience includes leading large-scale supply chain optimization, technology, and business process implementations at large fleet and energy companies including UPS, US Freightways, and Chevron.
Ryan has been published or quoted in many industry publications such as Forbes, Waste Advantage, The PMAA Journal, The Houston Chronicle, National Petroleum News, Transport Topics, Fleet Owner, Convenience Store Decisions, Food Logistics, OPIS, C-Store Canada, Aggregates Manager and International Fleet World. He has presented at leading conferences such as SIGMA, IFDA, Waste Expo, OPIS Fleet Fueling and NACS.