While the nation has braced for a more severe than usual hurricane season as predicted by the National Oceanic Atmospheric Association, so far the current cyclone season has been flat.
Luckily, as of early September, there had been no hurricanes and only a half-dozen tropical storms in the Atlantic, according to Bloomberg Business Week. Despite the lack of storm activity, all fuel retailers are advised to have a plan in case an emergency as intense as Hurricane Sandy puts fuel and in-store sales at risk, and sends profits sinking.
The hurricane season runs from June 1 to Nov. 30, with most of the stronger storms typically developing in September and October, so the most threatening storms may come in the next couple of months. According to David Zahn, vice president of marketing for Houston-based FuelQuest, “Preparedness, timely data and analysis, and a flexible central response plan are the keys to maintaining supply before and after the storm passes.”
Melanie Tydrich, senior residential/light commercial channel manager for Kohler Generators, says being prepared is good for business and good for the community. “Prepared retailers can help a community recover after a disaster, plus reap financial benefits as well,” she says. “Stores with backup power can satisfy customer needs like fresh water and fuel and see a sales boost. At the same time, they’re protecting inventory requiring refrigeration.”
What can retail fuel dealers do to prepare for the annual storm season? Zahn recommends retailers:
- Plan: Have secondary and tertiary supply and carrier options available. Maintain generators at retail locations to reopen as soon as possible after the storm.
- Prepare: Determine supply availability at least four days in advance of anticipated landfall. Top up tanks before the storm arrives to reduce run-outs (outages) and communicate with suppliers and carriers ensuring availability.
- Monitor: Keep abreast of changing conditions at each site; watch inventory levels and sales in case of demand swings that can change replenishment plans.
- Respond: The best plans change. Communicate constantly with suppliers and carriers so they can adjust their plans with yours. Real-time analytics can speed response and help you from being overwhelmed by the unanticipated.
- Control: Flooding causes many problems, including equipment failure and product contamination. Wet-stock analytics identify faulty equipment and water contamination, preventing costly fines. Also keep an eye on pump pricing, because some states have anti-gouging laws with watchful attorneys general.
“When possible, pre-plan for fuel emergency preparedness in coordination with your supply team, fuel suppliers and carriers,” says Zahn. “Aspects of your plan should include communications, stand-by supply commitments and up-to-the-minute demand forecasting to ensure supply goes where you need it most. Remember to take into account the fuel needs of generators and other emergency backup systems that will be critical for operations if there is a power outage.”
For retailers, preparedness means additional complexity from keeping abreast of fuel inventories, changing demand forecasts and multiple supply and freight options. Zahn says fuel management automation tackles that complexity, allowing retailers to adjust to demand swings and potential supply disruptions. The availability of near real-time fuel information on solutions built around industry best practices enables retailers to stay on top of any rapidly changing situation.
Different weather conditions will require different reactions in terms of fuel-supply decisions, he says. Severe weather may curtail traffic and consequently fuel demand, which may cause fuel buyers to slow purchases.
“When dealing with Mother Nature, preparedness, solid analytical tools and flexibility are the best assets to drive security of supply,” Zahn says.
Retailers can visit www.weather.gov for up-to-date forecasts across the United States, and http://www.nhc.noaa.gov/ for hurricane tracking.
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