Supply Chain Resilience

[Post-landfall updates continue below.]

Hurricane Melissa is forecast to make landfall on Jamaica sometime early on Tuesday, October 28 (more). It will probably be a slow-moving Category 4 or 5 storm bringing catastrophic rains and 140 mile-per-hour plus winds.

High winds and coastal storm surge will wreak havoc. The impact of flooding on transportation and water infrastructure is of particular concern. Thirty and more inches could inundate much of Jamaica on October 27 and 28.

Almost 3 million people live on Jamaica. The island is roughly 145 miles long and 50 miles wide (or about 4400 square miles, 11,000 square kilometers).

In 2024 Hurricane Beryl passed near Jamaica as a Category 4 storm seriously disrupting the electrical grid’s distribution network. But power was restored for over 90 percent of customers within one week. Hurricane Gilbert (1988) disrupted both distribution and transmission networks leaving many without power for months. (More and more.)

Jamaica’s National Water Commission supplies potable water for almost three-quarters of the population (see map below). Over 80 percent of Jamaica’s water is pumped from groundwater. Pumps require grid power or emergency back-up power. Electrical generators require fuel.

Petrojam Ltd. operates a petroleum refinery near Kingston. But Jamaica imports much more refined fuel than it produces. In recent years, over sixty percent of refined fuels consumed in Jamaica have been imported, mostly from the United States. Refined fuels are used to generate a high proportion of Jamaica’s grid power. In case of a long-term grid outage, fuel demand is likely to increase to support water pumping, cell tower operations, warehouses, trucking, and emergency generation needs. Supply and demand could experience exacerbated disequilibrium because fuel to generate electricity is often not the same as fuel to satisfy other energy consumption needs. Fuel distribution/delivery is mostly by truck. This distribution capacity is not sufficient to gap-fill infrastructure, commercial, and residential demand during a long-term grid outage in combination with transportation impediments. (Here and here and here.)

About eighty percent of Jamaica’s food is imported, mostly from the United States. Roughly 60 percent of food flows usually support the tourist sector in Jamaica (here). Major grocery retailers include Progressive Grocers, Hi-lo Food Stores, and PriceSmart. A market leading food importer/wholesaler is Everything Fresh. Continued or disrupted flow by these high proportion providers should offer meaningful indicators of overall network fitness in the aftermath of Melissa. As is the case for most islands, the food supply chain serving Jamaica is not especially Just-In-Time. Substantial warehouse stocks are usually maintained — especially for hurricane season.

Melissa seems likely to cause time-extended grid outages. The longer the grid is down the more important recovery of water systems, fuel delivery, and food availability. Strategic capacity for fuel and food is concentrated at the Port of Kingston (more and more). If port operations can quickly resume, upstream flows will resume. Maritime movement — or current lack of movement — can be monitored here. The nearest NOAA buoy is over 200 miles southeast of Kingston. Wave and wind forecasts and history for Port of Kingston are available here. The Crowley Maritime schedule for Jamaica (more) will also help confirm and clarify the general velocity of inbound post-hurricane flows.

Pumping capacity for system replenishment is the most important flow-point (or choke-point) for providing potable water. This capacity is currently distributed over more than 150 pumping sites. As a result of this decentralization, catastrophic loss of capacity should be mitigated. But if the grid is gone, then fuel flows inbound and outbound of Kingston become even more important. Monitoring — and facilitating — fuel flows through the neck of the network’s hourglass at Kingston could become the key means for expediting flows of fuel and food and water to survivors.

[NOTE: As of Monday morning, October 27, web-based resources hosted in Jamaica are loading more slowly or not available.]

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UPDATE October 28, 0400 Eastern Time: Slow moving, CAT5 Melissa remains southwest of Jamaica. Landfall is now forecast for late morning or this afternoon proximate to the 78th Meridian (see map below). The current forecast for the Port of Kingston suggests the worst conditions will emerge mid-afternoon with wind gusts above 50 mph, wave heights of 12-16 feet, and rain accumulation exceeding one inch per hour for much of this afternoon.

UPDATE, October 29, 0400 Eastern: Melissa just made landfall on eastern Cuba (here). The situation in Jamaica will remain uncertain until sunrise allows for closer and wider observations. But early indicators suggest key elements of network capacity for receiving and moving water, food, and fuel have survived. According to the Kingston Gleaner newspaper:

Hurricane Melissa, according to the US National Hurricane Center, made landfall near New Hope, Westmoreland, with wind speeds of up to 185 mph. As the disaster pummeled those areas, rendering far lighter winds and rainfall in the capital city, Kingstonians tuned in to weather broadcasts and social media reports relaying reports of massive flooding, heavy winds, and the overall trauma of what the Meteorological Service of Jamaica (Met Service) warned was the island’s worst disaster. “We have been spared, but at the same time St Elizabeth and Westmoreland haven’t been spared,” said Burgess [a Kingston-based civil engineer], expressing dismay for Jamaicans affected in those primary hit parishes, and also those impacted in the eastern islands.

The maritime channel south of Jamaica is busy again. At least four tankers can be observed heading for Kingston harbor. Webcams at the port area show calm conditions and lights (here and here). It will be a tough and extended recovery for thousands in Jamaica. But it appears that response and recovery will be supported by significant continuity of network capacity.

Force on Target is fundamental to resilience probabilities. Melissa was (and remains) a monstrous force. But the hurricane’s targets in Western Jamaica encompassed the island’s least concentrated population (see map above) and almost no concentrations of supply chain capacity. If the same force had made landfall 75 miles east, consequences would have been massively multiplied.

UPDATE: October 30, 0600 Eastern: The Port of Kingston does not seem to have opened yet. Details of channel safety or channel clearing are not available to me. But the number of vessels now anchored off the port suggest that maritime operators expect to be able to offload soon. Yesterday, Wednesday, local media reported that the port expected to reopen today. I count at least six tankers and three cargo vessels standing by. Midday yesterday about three-quarters of Jamaica’s grid customers continued in the dark, but water system disruptions were being characterized as “minimal” (here). Reliefweb is aggregating helpful multi-agency reports here: https://reliefweb.int/country/jam

1100 hours Eastern (October 30): I still don’t have “official” confirmation that the Port of Kingston has reopened, but the terminal is certainly conducting operations and I see a handful of vessels at the docks.

UPDATE: October 31, 0400 Eastern: The Port of Kingston is open and was fully operating yesterday. On Thursday twenty-one vessels arrived. This morning I count eight cargo ships at the docks (see AIS mapping image below), several more are at anchorage nearby, and eight new vessels are scheduled to dock today (October 31). Both cargo and tanker vessels are contributing flow.

Roughly seven out of ten grid customers continue without power (see before/after satellite views below). CAT5 impacts obviously tangled the distribution network island-wide. In the hurricane’s direct path over western Jamaica a complete re-build of the distribution network will be needed in many places. I have not yet seen a credible assessment of impacts on Jamaica’s transmission network. My guess is that yesterday’s efforts were focused on triage opportunities for restoring grid power to high priority facilities and assessing/planning how to prioritize next steps. Anywhere the transmission network has failed will receive high priority attention. While transmission networks are recovered there will be slow progress in reconnecting the distribution network.

The resilience of food and fuel supply chains are especially (obviously?) crucial in case of a long-term grid outage. If the port was not receiving and discharging food and fuel — “feeding” survivors, emergency generators, water systems, and transportation — the risk of thousands not surviving Melissa would be much higher than it is today with flow disrupted but persisting. (More and more.)

UPDATE, November 1, 0700 Eastern Time: I am not yet finding or hearing well-documented assessments related to Jamaica’s electrical grid. I am aware of various reports that claim up to seventy percent of the transmission network has been seriously damaged. This is plausible, but should not be accepted without much more validation. Pre-Melissa Jamaica’s grid consisted of about 750 miles of high voltage transmission lines and about 12,000 miles of distribution lines (12-24 kV). Seventy percent of the distribution network being down strikes me as consistent with other evidence. I suppose a high proportion of longer-distance transmission lines might transit east to west through the worst impacted north-south corridor. But I don’t want to accept such a dire estimate for the transmission network — and related recovery calendar — without much more corroboration.

UPDATE, November 2, 0500 Eastern Time: Credible reports — specifically from Jamaica Public Service — indicate that grid outages have now been reduced from more than three-quarters of customers to somewhat less than six in ten customers (here). Most of the restoration involves the distribution network on the eastern third of the island (including metro Kingston), but there are also reports of progress being made in harder hit central and western areas. According to The Gleaner newspaper: “JPS has also indicated that it is providing power to 92 National Water Commission (NWC) pumps, which is 37% of its critical facilities. These pumps are located in St Thomas, Kingston, St Andrew, St Catherine, and Clarendon.”

UPDATE, November 6, 1500 Eastern Time: According to Jamaica Public Service — the national grid operator — their grid damage assessment has now been completed. They report that as of this morning 93 percent of transmission lines and 96 percent of sub-stations are operational. Approximately 70 percent of the electricity distribution network is operational. Roughly half of customers are currently connected to grid power. I have asked but have not received an answer as to how 70 percent of the distribution network has been recovered, but only half of customers are reconnected. I have also not — yet — found web-based written confirmation of this information. Several firms have done initial estimates of insured losses. These estimates range between $1.5 billion to $4.5 billion. Rough estimates of total losses are more than 10X insured losses.

UPDATE, November 13, 1100 Eastern Time: According to the Jamaica Observer channeling reports from Jamaica Public Service, almost two-thirds of Jamaica’s grid customers have been reconnected (more). This slow but steady progress is consistent with a widely shredded distribution network, but substantially resilient transmission and generation networks… especially when a surge in restoration crews is geographically and financially constrained. On November 12 the government’s Office of Utilities Regulation launched a webpage providing an interactive map with electricity, water, and telecommunications restoration updates by parish.

The Free Trade thesis of the late 20th Century is being challenged by President Trump’s tariff-positive antithesis and much more autarkic vision for the 21st Century United States. This thesis-antithesis clash has not produced a clear new synthesis — at least not yet. There are vigorous efforts to restore and preserve the prior thesis. Below is a one minute commercial produced and placed by the provincial government of Ontario, it features an edited version of 1987 remarks by President Ronald Reagan explaining the benefits of free trade. President Trump has responded by canceling trade negotiations with Canada’s federal government. Supply Chain Resilience fit for the thesis is not well-calibrated with the antithesis. While waiting for a synthesis to evolve, supply chain operators are placing their own bets.

Residents of the United States are the most high volume, high velocity consumers in the world. China’s factories are the most high volume, high velocity suppliers in the world. Demand and supply are engaged in an increasingly serious spat with already volatile outcomes.

The Financial Times reports, “US Treasury secretary Scott Bessent has accused China of trying to hurt the world’s economy after Beijing imposed sweeping export controls on rare earths and critical minerals, hitting global supply chains… Maybe there is some Leninist business model where hurting your customers is a good idea, but they are the largest supplier to the world,” he added. “If they want to slow down the global economy, they will be hurt the most.”

President Trump wants the United States to make more stuff again. He wants to recover US manufacturing capacity and jobs — especially related to producing goods perceived as fundamental to national security.

Trump administration policy and practice can be framed by three goals:

Discourage imports. Tariffs complicate and constrain supply by increasing both direct and indirect costs — eventually prompting increased prices, reduced import sales, and more opportunity for domestic producers. For example, last week a major European maker of farm equipment “has been forced to pause exports of large equipment to the US because of “alarming” and little-known new tariffs that are hitting hundreds of products” (here).

Encourage domestic manufacturing. Tax incentives, tariff waivers, and direct government investment are being deployed to support old and new industrial sectors perceived as fundamental to US economic and military essentials. Examples are here and here and here and here.

Generate federal government revenues: Tariffs are currently conceived as a sort of slotting fee that non-US suppliers pay for the privilege of accessing the US consumer. Tariffs support the two prior goals and generate much needed revenue for a high-deficit federal budget. Through the end of September more than $200 billion in tariff revenues were received (here and here).

China’s global exports grew over eight percent in September, while its flows to the United States declined by more than a quarter (here and here).

Euronews reports, “German exports to the United States have fallen for the fifth consecutive month, reaching their lowest level in nearly four years, as the impact of tariffs imposed by US President Donald Trump continues to reverberate across transatlantic trade” (more and more).

For the last five months postal parcel traffic to the United States has fallen by 70 percent (here and here).

There is demonstrable progress in discouraging imports. For all of 2025 US tariff revenues could easily triple 2024 totals (or more).

But increasing import costs and reducing import volumes are easier — and especially quicker — than rebuilding domestic manufacturing capacity (here) or opening more rare earth mines (here) or supporting industrial innovation (here and here and here). There is a real risk of reduced product availability and higher prices for a range of goods, prompting negative economic outcomes and related political feedback in the United States. There are also risks of trade retaliation impacting US exporters (here and here).

Meanwhile in China, economic growth has been sluggish — at least compared with the quarter-century before 2008 (here and chart below). An extended property crisis, deepening deflationary pressures, and reluctant consumer demand are mutually reinforcing and tough to undo. China’s manufacturing oversupply is a domestic as well as an international challenge (more).

The US is an extremely consumption-oriented economy. China is an extremely production-oriented economy. This could be — even has been — complementary. But the US and others increasingly perceive China to be economically predatory — and such predation could extend beyond economic competition. China perceives that the United States is being arbitrary and aggressive in restraining China’s competitive prowess and national achievements.

Starting in late September a month-long US-China detente deteriorated (here and here and here). Now China is threatening to cut-off global purchases of rare earths (more), while the US is threatening to cut-off China’s ability to sell much of anything in the United States (more). If either threat is consummated, the consequences will be tough to unwind. Several supply chains are being whip-sawed by these tensions, measures, counter-measures, and uncertainty. Trade flows have already been seriously disrupted. Friction is building.

The strategic value of anticipatory Supply Chain Resilience is certainly being demonstrated. But many of the best strategies will be existentially challenged if this tit-for-tat unfolds into mutually assured destruction of demand and supply networks shared over the last four decades.

Anyone who reads four or more of these blog posts will recognize I am preoccupied — obsessed — with demand. My understanding of substantive, sustainable Supply Chain Resilience is tightly related to demand dynamics. It is my experience that high-capacity supply chains are very adept at adapting when significant effectual demand is pulling. This bias has served me well. Again and again demand dynamics (or lack thereof) is a meaningful frame for observing — and discerning — complex reality. But bias is bias. Each of us need to recognize our biases if we have any hope of self-correction when fundamentals begin to shift. In the video below, Greg Daco, chief economist with EY, explains why he is currently concerned with supply shocks. Give him at least two minutes to make the case.

In 2024 a bit more than twelve percent of US residents — roughly 42 million Americans — received benefits from the Supplemental Nutrition Assistance Program or SNAP. Last year close to $100 billion in federal funding was spent on SNAP.

Policy adjustments in the One Big Beautiful Bill, passed by Congress and signed by the President on Independence Day, seek to reduce SNAP expenditures, potentially twenty-five to thirty percent.

SNAP beneficiaries are not evenly distributed geographically or as demographic proportions. According to the US Department of Agriculture, in 2024, “the share of residents receiving SNAP benefits in each State ranged from as high as 21.2 percent in New Mexico to as low as 4.8 percent in Utah. In 36 States, the share was between 8 and 16 percent” (more). Eligibility and participation rates vary considerably by population area. The new policies are aimed especially at tightening eligibility. More rigorous eligibility requirements also tend to reduce participations rates — even among those who are eligible.

SNAP beneficiaries can be a crucial slice of the consumer market for many grocery retailers. While low-income urban neighborhoods have concentrated populations of SNAP beneficiaries, whole counties with high proportions of SNAP beneficiaries is mostly a rural characteristic. Please see the map below (this map depends on decade-old data, but changes in population proportions have not been dramatic). According to Grocery Dive, “Some grocers will face harder hits from the SNAP changes than others. While SNAP accounts for roughly 12% of grocery sales in the U.S., it can account for less than 1% of sales at a higher-end grocer and more than 60% at a grocer serving low-income urban or rural areas…” Many of the retail locations most dependent on SNAP consumers are already among those with the lowest margins and most vulnerable to failing. Many of these retail outlets serve expansive rural areas.

States have various options for how new SNAP eligibility requirements will be implemented and measured (here and here and here). Results will vary and so will market (and presumably political) responses. The longer-term impact on grocery demand and related implications for supply will not be clear for another six to nine months — and even then, this is not a closed system where SNAP variables can be cleanly separated from other demand factors.

Still, the forthcoming SNAP reductions will further complicate food access by the most financially constrained US households. Food banks and other sources of local emergency assistance are already unable to fulfill current demand (here and here and here and here). Wage growth among the lowest paid quarter of workers is falling (see second chart below and more) even as grocery prices have continued to increase.

But the intention is to reduce SNAP-supported demand, reduce government expenses, and encourage greater self-reliance. All else being equal (which will not be the case), more rigorous eligibility requirements will incrementally reduce grocery demand overall and dramatically reduce effectual demand by the most vulnerable (both vulnerable consumers and vulnerable retailers). In high volume, high velocity demand and supply networks it is the peripheries — geographic and proportional — that are most likely to be shed. The more streamlined supply chains that emerge are usually marginally more resilient. But already underserved communities and individuals are often left profoundly less resilient.