Hurricane Season and Its Impact on Auto Players - AutoSuccessOnline

Hurricane Season and Its Impact on Auto Players

As a direct result of ongoing storms, dealers may need to reposition inventory, moving it out of harm’s way and into safety.

Multiple, severe storms and hurricanes, including Hurricane Ida, have made landfall in the U.S. so far in 2021 — and even more are expected to come as the calendar turns from late summer to early fall. In August, Ida swept across the Gulf Coast up through the northeast, damaging more than 200,000 vehicles in the process. That’s in addition to the estimated near-400,000 flood-damaged cars already on the road this year.

The impact of severe storms and hurricanes on the automotive supply chain and various players in the industry is serious — regardless of whether those players are looking to buy or sell vehicles, rent out cars, transport vehicle inventory or use fleet units to conduct other forms of business. Additionally, all these storm-related challenges add even more supply chain disruptions to an already-burdened auto industry grappling with ongoing coronavirus-pandemic concerns, strained carrier capacity, high fuel prices and a widespread semiconductor chip shortage. 

It’s important for auto logistics companies to take these new severe weather challenges seriously. Having teams closely monitor situations on the ground to provide regular updates to their carriers, drivers and customers is critical — making this type of around-the-clock service a necessity for this industry. 

As a direct result of Hurricane Ida and ongoing storms impacting many more parts of the country, companies are faced with identifying the major needs and obstacles in their way. And, most importantly, there’s an important role auto logistics companies can play in their immediate and future successes.

The Need to Reposition Inventory 

Perhaps one of the most crucial needs companies are facing is the need to reposition inventory, moving it out of harm’s way and into safety. To prevent damage, many retailers and rental car companies are looking to transport vehicle inventory off their lots and into locations with more coverage from the storm’s many impacts. Fleet-management companies, automakers and other companies with fleets are also looking to move many of their units off-site and into more secure locations, away from the areas being hardest hit. 

Once storms and precarious weather conditions have moved on, logistics providers can then help companies — vehicle retailers in particular — replace their inventory and restock their lots again.

Preparation for Flash Flooding and Future Storms 

Beyond just reacting to what is already happening on the ground in these storm-hit areas, companies must be preparing for any flash flooding that will occur because of these storms — as well as for any future hurricanes, tropical storms or severe weather that might take place.  

Many times, companies that have most of their vehicle inventories in low areas must start moving their vehicles to higher ground for risk mitigation, largely avoiding damages associated with flash floods. Many businesses will want extra protection for their vehicles, looking to transport inventory into more secure storage sites where vehicles can be monitored and held in insurance-covered facilities until they are ready to retrieve them. 

Anticipation of Fuel Increases 

Because so many refineries are in the southern U.S., particularly along this coastal area, many in the automotive industry are anticipating significantly higher fuel-price increases in the days and weeks to come — even higher than what North America has seen in recent months. Such increases won’t just hit the storm-impacted states, however; these price hikes will impact states across the country.  

Companies that regularly transport vehicles will want to take rising fuel costs into consideration as they make plans for the near future and account for various expenses impacting their respective businesses. In some cases, dealerships, rental companies and other companies may decide there is more value and overall cost savings in outsourcing services like car haul or drive away to a logistics provider than taking on all those costs and resource-intensive operations themselves.

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