Recently, U.S. companies diverted increasingly more of these manufacturing to PuertoRico. The choiceremains solid, for as long asyour supply lines are designed for the whipsaw of unpredictableweather.
On Sunday afternoon, HurricaneFionaknocked out the energy for1.3millionresidents onthe island, in accordance with PowerOutage.US, a tracker that collects data on power failures. Internet outages over the island also spiked because the power went.The storm happens five years afterHurricane Mariaslammed in to the island,killing almost 3,000 peopleandwiping out the island’spower grid.
“Our grid could be functional, but it’s fragile,” Sergio Marxuach, policy director at theCenter for a fresh Economy, a Puerto Rico-based nonpartisan think tank, told NBC news yesterday. The slightest storm winds can simply bring about nearly 500,000 homes losing power.Additionally,LUMA Energy, the private company that handles the transmission and distribution of electricity in Puerto Rico, stated that full power restoration could take days.
“The damages that people are seeing are catastrophic,”Pedro Pierluisi, the Governor of Puerto Ricotoldthe Associated Press on Sunday.
Excluding the human toll of this type of power loss, significantrainfall, andother issues due to the natural disaster, the business enterprise interruption is nothing or even significant. Many roads have already been left impassable because of downed trees and mudslides, and torrential rain hassubmerged cars, essentially eliminating any possible transfer of goods for businesses.The scale of the damage could be a whole lot worse for companies which have recently moved their operations to the island, because they likely still along the way of moving production. And for all those which are still considering re-shoring to the U.S. through Puerto Rico, the news headlines maygive you pause.
You need to consider whether amove is justified on both a price and certainty scale. While, yes, you mayhave saved byoffshoring to countries withinAsia previously, does a move nearer to home deliver similar cost benefits? And are you experiencing enough alternative vendors and method of transportto justify a move, given the uncertainty of the island’s weather.
Visibilityintosupply chains can be vital. Collecting data from vendorscan help precisely mapentire networks of business sites,including warehouses, factories, distribution centers, hubs, yards, and ports.After that you can utilize this information to boost visibility of products and assets, provide up-to-the minute ETAs, avoid bottlenecks, reduce dwell times, miss fewer slots, lower costs, and improve customer support, Inc. reported in March. This may help reroute products, or find alternative sources should disaster strike.
A lot of businesses start to see the benefits in locating operationsto Puerto Rico–and once and for all reason. Puerto Rico largelyoffers cheaper labor compared to the U.S.while still being considered domestic, along with government subsidies designed to boost economic development. The island, which became a U.S. territory in 1917,”gets the most aggressive incentives in the united kingdom,” Rodrick Miller, CEO of Invest Puerto Rico, aneconomic development organization that focuses onattracting new businesses and capital to foster economic growth, said at a Forbes event in February. Whether those benefits outweigh the expenses remainsa judgment call.