Hurricane Season: Concentrating on Concentrations

[July 1 Update below] Some readers found my June 10 post on hurricane season, “a bit too thin” or “… “too fast”… or “too big-picture” (among other comments, including some positive). So, here’s a try at something meatier, slower, and more tightly focused. The original post was organized around threats, vulnerabilities, and consequences. Looking at Hurricane Ian’s consequences I argued, “Because midstream capacity concentrations were not hit, flow continued downstream to concentrations of demand. The harder the hit upstream the more disruption (or worse) downstream.”

The threat of a major hurricane — Category 3 and above (more than 111 miles per hour) — in the United States is concentrated in Florida, Texas, and Louisiana. Since 1851 three-quarters of major hurricanes recorded on the mainland United States have involved these three states. (Puerto Rico and Guam are much smaller targets but experience even more frequent cyclones per square mile.) The first map below only shows Category 4 and 5 hurricanes since 1924.

In most of the United States supply chains will usually be resilient (not invulnerable, but adaptable) unless key capacity concentrations are lost or throughput is significantly reduced for an extended time. Two well-known examples are when the Colonial Pipeline was disrupted by a cyberattack and when contamination halted production at Abbott’s Sturgis, Michigan infant formula facility. In each case a “Pareto Proportion” of supply for specific sources of demand suddenly stopped.

Similar concentration risks exist in a wide array of networks. Food tends to be most heavily concentrated at the distribution level.(Food production concentration can also be intense, as the infant formula example demonstrates. But in most food categories there are abundant replacement products.) Fuel is highly concentrated at both production and distribution levels. The second map below shows refineries located in “hurricane alley”. The third map shows refined product pipelines. (In Florida fuel flows mostly depend on maritime deliveries to Port Tampa Bay — more than 40 percent — and Port Everglades — about one-third of state fuel consumption.) Local fuel distribution capacity is mostly fixed by the number of nearby racks, regionally anchored fuel tanker trucks, and their drivers. Freight flows — especially long-distance flows — are concentrated in a comparatively few channels. For example, the fourth map below shows how freight flows depend on a few Interstate highway corridors. I-10, I-75, I-35 and I-95 would be especially tough to replace.

Over 70 percent of food consumed in the United States is carried by truck. In most of this hurricane prone region some three-party combination of Walmart, Publix, HEB, Kroger, C&S Wholesale, Albertsons, and Associated Wholesale Grocers distribute a Pareto Proportion of food consumed. Their Distribution Centers are often clustered (see the last map for an example). Their inbound and outbound trucks usually take very similar routes. According to the Commodity Flow Survey, Freight Analysis Framework, and other sources roughly one-third of food products in this region originate in the host state and another 10 to 15 percent originate in a neighboring state. Roughly half of food consumed comes from farther away. (The FEWSION project is a good source for aggregated food flow data and helpful measurement tools.)

Right now, the electrical grid is humming. Fuel pipelines and racks are flowing. Interstates are open. Truck stops are operating. In late June, gasoline and diesel inventories for this region are in good shape. According to FreightWaves, trucking capacity in the Southeast US is tighter now than in recent years — but perhaps better matched with consistent demand. According to DAT, the demand for refrigerated vans — especially important for food flows — is tighter in the Southeast than in most of the rest the United States. But this is “tight” as in tailored, not a death-grip. Grocery distribution centers are receiving inbound from near and far while discharging daily into their retail networks.

Good news: These food, fuel, and freight concentrations have enormous capacity. When and where this capacity persists it is fundamental to serving the needs of those hit hard by hurricanes or other disasters. Bad news: if these capacity concentrations are seriously disrupted alternatives can be few and far between…

The hurricane forecast for the Atlantic is foreboding. Ocean temperatures are hot (here and here). As of Thursday morning, June 27, the National Hurricane Center says, “A tropical wave located several hundred miles west-southwest of the Cabo Verde Islands continues to produce disorganized shower and thunderstorm activity. Environmental conditions are forecast to be conducive, and development of this system is anticipated. A tropical depression or tropical storm is likely to form this weekend several hundred miles east of the Windward Islands while the system moves westward at 15 to 20 mph.”

Ready or not.

Category 4 and 5 Hurricanes since 1924 (Source: NOAA)

Concentration of Refining Capacity (Source: Energy Information Administration)

Refined Petroleum Product Pipelines (Source: Energy Information Administration)

Freight Volume by Weight (Source: Bureau of Transportation Statistics)

Four market-leading grocery distribution centers west of Jacksonville, Florida. Sources for over 80 percent of grocery flows serving a wide region. (Approximately 16 miles west to east)


July 1 Update: Since Thursday that “Tropical Wave” has become Hurricane Beryl. The Weather Channel reports, “B​eryl is the easternmost hurricane and first “major hurricane” (Category 3+) to form in the tropical Atlantic during the month of June.” In the next 24 hours Barbados, St. Lucia, St. Vincent and the Grenadine Islands, Grenada and Tobago will be hit hard. Below is how the models set-up potential action for late this week. Depending on Beryl’s track, very different capacity concentrations are potentially vulnerable. More on July 2 and the Washington Post reports, “Beryl strengthened into Category 4 a week earlier than any storm of that strength ever observed, breaking a record set by Hurricane Dennis in the hyperactive 2005 storm season. It also became the fastest-strengthening storm on record before the month of September. This kind of early-season activity in the area is a strong predictor of a large tally of tropical storms by late fall…”