The Impact of Hurricanes on the United States Supply Chain: The Case of Helene and Milton

Hurricane Milton intensifies in the Gulf of Mexico Hurricanes are devastating events that have consequences beyond loss of human life and damage to physical infrastructure. For logistics, they are a severe threat that disrupts the flow of goods and affects both local and international trade. In the case of hurricanes Helene and Milton, U.S. supply chains have suffered serious disruptions, revealing the vulnerability of logistics systems to large-scale natural disasters. Below, we analyze in depth how these hurricanes affect American logistics, with special focus on impacts on transportation, industrial production, operational costs, and industry responses. Disruptions in Key Transportation Routes Hurricane Helene, which made landfall as a Category 4, and Hurricane Milton, expected to arrive as Category 5, have caused and will continue to cause major disruptions in U.S. transportation routes. Main land routes, such as highways and roads, have become impassable in several states due to flooding and landslides. According to the American Transportation Association, about 15,000 miles of roads were severely damaged after Helene's passage, directly affecting the transportation of goods and services. These disruptions cause a domino effect in land logistics, where companies must redirect their shipments, increasing delivery times and operational costs. According to a report by the American Society of Civil Engineers, transportation infrastructure damage after a hurricane can take up to six months to be completely repaired, meaning a long period of logistics disruptions. Paralysis of Strategic Ports and Impact on International Trade The Gulf of Mexico ports and the southeastern coast of the United States are among the most important for international trade. The Port of Miami, for example, handles more than $43 billion in goods annually, being one of the main entry points for goods from Latin America and Asia. During Hurricane Helene's passage, port operations were suspended for five days, generating delays in the entry of thousands of containers. Hurricane Milton is also expected to cause similar disruptions in Florida ports. These paralyses not only affect imports and exports of products but generate an imbalance in goods distribution throughout the country. 40% of goods maritime traffic in the United States transits through Gulf of Mexico ports, and any prolonged interruption in this region severely impacts the supply chain. Additionally, port congestion when operations resume is another significant problem. After Hurricane Ida's passage in 2021, delays in goods entry and exit at affected ports averaged 8.5 days, according to the Maritime Trade Council. A similar phenomenon is expected after Milton's passage, affecting the efficiency of product distribution at national and international levels. Interruptions in Courier and Cargo Services Courier companies like FedEx and UPS are vital components in U.S. logistics, and their services have been severely affected by recent hurricanes. In Helene's case, FedEx and UPS reported that their operations were limited in more than 500 postal codes in North Carolina, South Carolina, Georgia, and Tennessee. This represents a significant disruption in last-mile logistics, which is essential for e-commerce and home deliveries. In terms of volumes, it is estimated that FedEx and UPS together handle about 36 million packages daily in the United States. Partial suspension of their services due to hurricanes like Helene and Milton means millions of packages don't reach their destination on time, impacting not only individual consumers but also companies that depend on just-in-time deliveries. These disruptions generate increased operational costs for courier companies, which must redirect their routes and face unexpected logistics challenges. Additionally, congestion in distribution centers and accumulated demand after the hurricane passes can lead to additional delays, creating a chain of problems that affects the entire system. Damage to Industrial Infrastructure and Plant Shutdowns Factories and industrial plants located in the southeastern United States have been severely affected by Hurricane Helene, and Hurricane Milton is expected to cause similar or greater damage. According to the National Association of Manufacturers (NAM), the manufacturing sector lost more than $1.2 billion in revenue during the five days following Helene's passage, mainly due to plant shutdowns from power outages and structural damage. The textile sector, in particular, has been one of the most affected. Kimberly Glas, president of the National Council of Textile Organizations, reported that more than 21 plants have closed in the last 18 months, and recent storms have only exacerbated this situation. The shutdown of these plants, which produce essential goods for the global supply chain, delays production and puts inventory availability at risk. This type of disruption not only affects local manufacturing but also impacts global supply chains that depend on American products. According to a McKinsey analysis, a two-week delay in manufactured goods production can generate up to a 25% increase in inventory and transportation costs for companies that depend on those products. Increase in Operational Costs and Long-term Effects The disruptions caused by hurricanes not only generate immediate logistics problems but also significantly increase companies' operational costs. In Helene's case, transportation and logistics companies estimate their costs increased between 10% and 15% due to the need to redirect routes and hire emergency services, such as additional transportation and rapid repairs. With Hurricane Milton, costs are expected to rise even more, especially if disruptions are prolonged. Additional transportation costs also affect small and medium enterprises that depend on agile and efficient supply chains. A U.S. Chamber of Commerce study found that small businesses can experience a 20% increase in their operational costs during the first six months after a hurricane, due to supply shortages and distribution problems. In the long term, uncertainty generated by hurricanes can also lead to changes in companies' logistics strategies. Many organizations are expected to invest more in resilience technology, such as advanced supply chain mapping and the use of artificial intelligence to predict and mitigate climate risks. According to Gartner, 75% of companies plan to invest in resilience technologies by 2025, in response to growing logistics challenges derived from climate change. Industry Resilience Against Natural Disasters Despite immediate challenges, the U.S. logistics industry has demonstrated remarkable recovery capacity after natural disasters. Companies in sectors like textiles and manufacturing have accumulated strategic inventories that can minimize the impact of disruptions. In particular, the textile industry has sufficient accumulated inventory to maintain product supply during the first weeks after a hurricane, reducing immediate impact on consumers. Additionally, rapid adoption of technology in the supply chain has allowed companies to react faster to natural disasters. The use of real-time monitoring systems, drones to inspect infrastructure damage, and warehouse automation has significantly reduced companies' response time to these events. The Challenge of Maintaining the Logistics Chain Against Storms Hurricanes Helene and Milton have underscored the vulnerability of American supply chains to natural disasters. Port shutdowns, destruction of key infrastructure, interruption of courier services, and damage to industrial plants generate a cycle of disruptions that affects from production to final product delivery. As extreme weather events become more frequent, it is crucial that logistics companies invest in resilience and develop strategies to mitigate climate risks. Only with proactive planning and the use of advanced technologies will they be able to face future challenges.