Suppliers Find Logistics Payoff In Katrina Aftermath - InformationWeek

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Suppliers Find Logistics Payoff In Katrina Aftermath

The Port of New Orleans is expected to allow commercial ships into its ports this week after Katrina closed the doors on what is a major gulf waterway. The three terminals hope to serve about four ships daily, compared with normal capacity of 10 to 16 ships a day, says Gary LaGrange, the Port of New Orleans' president and CEO.

The cost to restore the port to full capacity is estimated at between $1.8 billion and $2 billion, of which 25% will be allocated to technology. That will include a more reliable communications infrastructure, considering the port's satellite and cellular systems failed, LaGrange says. "We can't afford to be without communications as we were those critical hours following the storm," he says. "This was a city at civil war for several days."

Trucks attempting to move goods in and out of that region won't have it easy, either. To reach a total of five affected ports in the Southeast, responsible for moving 450 million tons of cargo annually, they face miles of road closures and bridges washed away across Alabama, Louisiana, and Mississippi.

Technology plays a big role in helping businesses deal with the logistical issues. One of Wal-Mart Stores Inc.'s distribution facilities in Hammond, La., didn't have power and was unable to accept inbound or outbound deliveries for three days. The 100 stores it serves had to rely on eight neighboring distribution centers throughout the South. Wal-Mart's predictive-analytics software, which among other things helps the retailer prepare for natural disasters, ties into its replenishment platform. That allowed Wal-Mart to more easily redirect trucks to alternative distribution centers and prepare for large availability of emergency supplies like granola bars and sleeping bags, says Dan Phillips, VP of Wal-Mart's information-systems division. Wal-Mart uses transportation-management software to determine the best routes, and transmits instructions and directions to computers on board Wal-Mart trucks, which make up a fleet of 6,300 tractors and 38,000 trailers, he says.

Similarly, J.B. Hunt Transport Services Inc. provides route and fuel recommendations to drivers using a system based on internally developed software and Maptuit Corp.'s software, available as an application service on the Web. Maptuit combines sophisticated algorithms with information on more than 40 million roads, addresses, bridges, tolls, and fuel stops that it gets from government sites and other customers using its service. "During the first several days after the hurricane, many businesses didn't have fuel, and we were able to route around those areas," says Kay Palmer, CIO and executive VP at J.B. Hunt.

Chiquita Brands International Inc. suspended shipments to its facilities in Gulfport, Miss., which took in about 14 million 40-pound boxes of bananas last year. Chiquita relied on a contingency delivery plan once operations were shifted to ports in Freeport, Texas, and Everglades City, Fla., based on recommendations from transportation and logistics-optimization software.

Rerouting around railroad company Norfolk Southern Corp.'s largely destroyed 5.8-mile-long concrete ballast trestle across Lake Pontchartrain, from Slidell, La., to New Orleans, was done with software built in-house. Its transportation planners used what Northfolk calls its Thoroughbred Operating Plan, a combination of processes and software, to plot "what-if" scenarios in advance of Katrina's arrival, allowing for efficient rerouting of freight around New Orleans.

Photo by FEMA

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