California Wildfires: What They Mean for Logistics and Supply ChainsEverstream Team
- Since December 4, multiple wildfires have broken out in Southern California, affecting human life and supply chains in the Greater Los Angeles area
- One of the fires has grown to more than 230,000 acres, the size of New York and Boston combined, and is now the 5th largest in the modern history of California; containment, however, is still only at 10 per cent.
- Sections of large interstate and state highways essential for the flow of goods were temporarily closed, including Interstate 405 and US Route 101.
- Damages and delays may affect farmers and manufacturers and cause ripple effects down the line for large retailers and logistics companies.
- The wildfires are likely to further spread north of Los Angeles for the next few days and may only be contained by December 24.
On Monday evening, December 4, a number of damaging and disruptive wildfires broke out in Southern California, threatening human life and supply chains in multiple counties of in the Greater Los Angeles area. The magnitude of these wildfires was said to be unprecedented during the month of December, as most fires usually occur during hot and dry summer months. Several hundred structures have been damaged or destroyed, infrastructure has been impacted, and roadways have been subject to closures. Media sources reported that almost 200,000 people have been affected by evacuation orders and advisories. Numerous schools have been closed temporarily due to fire behavior, power outages and toxic smoke resulting from the fires. State and local authorities have declared states of emergencies in several counties to aid in the fire response. On December 5, authorities have, for the first time in history, elevated the official wind warning to the “extreme” level as winds could reach hurricane-like speeds of up to 80 mph. The fires have exhibited extreme rates of growth due to dry brush and dead trees, as well as exceptionally strong Santa Ana winds which develop over the Great Basin. Exceptionally strong Santa Ana wind conditions have been reported from Ventura County south to San Diego County and inland to Riverside and San Bernardino counties. Santa Ana winds were expected to peak on December 7, but resurged over the weekend on December 9 and 10 with speeds in the 20 to 30 mph range, especially across San Diego County, before rapidly diminishing on Sunday night and Monday morning.
As of early December 11, the following fires are currently still causing disruptions in Southern California:
|Wildfire name||Affected counties||Containment rate|
|Thomas Fire||Ventura, Santa Barbara||10 per cent|
|Lilac Fire||San Diego||75 per cent|
|Skirball Fire||Los Angeles||85 per cent|
|Rye Fire||Los Angeles||93 per cent|
|Creek Fire||Los Angeles||95 per cent|
|Liberty Fire||Sonoma||Near full containment|
Counties Affected by Wildfires
Ventura and Santa Barbara Counties
The largest of the wildfires in Southern California began in the area of US State Route 150 and Mistletoe Road on December 5 and is named Thomas Fire. As of December 11, it has spread to approximately 230,000 acres and is now the fifth largest wildfire in the modern history of California. Containment has dropped from 15 to 10 per cent over the weekend. Damage assessments indicated that at least 790 structures were destroyed and another 191 have been damaged. The majority of damage was reported along the outskirts of the City of Ventura, but the fire has also started to cause damage in Santa Barbara County south of the city of Carpinteria. At least 50,000 people have been evacuated throughout the area. Approximately 15,000 structures remain threatened by the Thomas Fire. No fatalities have been reported as a result of the fire. On December 5, up to 136,988 Southern California Edison (SCE) customers were temporarily without power in Ventura County, but that number has been reduced to approximately 3,200 on December 10, and officials have warned customers that power could be out for an extended time. On late December 10, Southern California Edison officials confirmed that up to 85,000 customers in Santa Barbara County were without power due to the resurging Thomas Fire.
San Diego County
On December 10, firefighters continued to battle the Lilac Fire which is currently ravaging the area near Old Highway 395 and Dulin Rd in San Diego County. The fire was holding at 4,100 acres and has been 75 percent contained. Sources indicated that three civilians sustained burn related injuries and one suffered from smoke inhalation complications. At least 182 structures have been destroyed, 23 structures damaged, and approximately 1,500 structures have been threatened. On December 8 and 9, approximately 19,200 SDGE customers were reportedly without power in San Diego County due to high winds and dry conditions, but that number has been reduced to several hundred on December 10.
Implications for Logistics
Throughout Southern California, numerous roads have been temporarily closed and then re-opened between December 5-10, including sections of large interstate and state highways which are part of the National Highway System, a network of highways that are considered essential to the country’s economy, defense, and mobility.
Below is an overview of the situation as of December 10:
In Ventura County, State Route 150 was closed eastbound from Reeves Road in Ojai to Stonegate Road in Santa Paula, as well as between State Route 33 and US Route 101. State Route 33 was closed northbound at Fairview Road from Maricopa Highway and Ojai Avenue to Matilija Canyon.
In Los Angeles County, US Route 101 was briefly closed in both directions due to a brush fire in the area near Los Alamos, Santa Barbara County on December 8, but has since re-opened. Interstate 405 re- opened on late December 6 in both directions between US Route 101 and Interstate 10 after being closed due to the Skirball Fire burning in the area near Bel-Air for about 9 hours. The highway is a heavily traveled thoroughfare, both by commuters and freight haulers along its entire length and is the busiest and most congested freeway in the United States.
In San Diego County, all lanes of State Route 76 were closed in both directions on December 10, and Old Highway 395 was closed between Lilac Road and State Route 76.
Roadway closures throughout Southern California also prompted transportation companies to halt operations at freight terminals, with YRC Freight closing two of its terminals in Sun Valley and Ventura as the Thomas Fire and the Cree Fire approached its facilities. Similarly, supply chain solutions provider Deringer informed customers that roadway closures started to have an impact on peak season logistics for supply chains in the region, preventing truck transportation from reaching destinations. According to XPO Logistics, some freight may be delayed by a day or two due to re-routing as needed for customers.
The State of California has also moved to suspend hours of service rules for truckers assisting with emergency relief such as clearing debris from highways, specifically that a truck operator cannot drive more than 11 hours within a 14-hour period. This could further slow down the movement of goods in Southern California over the next few days and has also started to impact spot rates for freight coming in and out of Los Angeles. According to Freightwaves, spot rates have increased by about 21 per cent from Los Angeles to San Francisco and Seattle, and even by 35 per cent to Dallas.
On December 7, sources reported that Union Pacific Railroad closed its tracks between Ventura and Santa Barbara due to the wildfires burning. Amtrak service was also suspended as a result between Los Angeles and San Luis Obispo, with no alternate transportation available. Tracks were expected to continue to be closed until December 9. However, the rail tracks are not a major north-south rail line for cargo moving into San Francisco or Las Vegas, thus impact on rail freight will likely remain minimal compared to August 2016, when a wildfire disrupted a major rail line for Union Pacific Railroad and BNSF Railway through the Cajon Pass for two days, delaying the distribution of goods and disrupting supply chains from West Coast ports to Kansas.
As most of the wildfires have been occurring on the outskirts of the city of Los Angeles, the impact on freight movements to and from the Ports of Los Angeles and Long Beach was also expected to be minimal, according to industry sources. However, the wildfires may still cause minor delays as truckers try to avoid areas near the fires.
Unlike wildfires in October 2017 which caused more than hundreds of flight cancellations at major Californian airports, no impact on commercial flight schedules have yet been reported due to the current wildfires and were not expected as of December 10.
Implications on Manufacturing and Supply
Large parts of the Southern California crop industry may sustain considerable losses from the ongoing wildfires, potentially causing ripple effects for the retail and logistics industries beyond the Greater Los Angeles area. Fallbrook in San Diego County is known as the “avocado capital of the world”, and near to where the Lilac Fire has destroyed a large area of forest and land. The avocado industry was reportedly worth USD 400 million in 2016 and California produces 90 per cent of the US avocado market. Although avocado farms were not directly impacted by the fire, large parts of the harvest may have been ruined due to the hot and dry winds. Lemon crops on farms near Santa Paula may have sustained less damage from temporary power outages and destroyed buildings in the area, though it was too early to fully assess damages. Multiple other crop growing companies such as fruit distributor Driscoll had closed their main operations in the Ventura and Oxnard area because of the fires.
Major retail companies such as Amazon, QVC and Stater Bros. Markets have set up distribution facilities in the Greater Los Angeles area due to the proximity to the Ports of Los Angeles and Long Beach and good highway infrastructure and are thus particularly exposed to key highway closures. Some sources reported that longer closures would have the potential to impact peak season logistics; as most of the larger highways were only closed for less than 24 hours, impacts were expected to remain limited. However, Ventura County which is threatened by the Thomas Fire is home to two large apparel companies which manufacture and ship out of the area: Patagonia, a maker of high-end outdoor clothing and Fashion Forms, which makes bras and other undergarments for women. Longer-lasting road closures could prevent the company from quickly reaching port facilities and customer locations, with detours causing delays and potentially higher transportation costs.
Large manufacturing and logistics companies, such as Toyota Motor and APL Logistics, have chosen the Greater Los Angeles area, also known as the Inland Empire, for their distribution facilities. These facilities operate as part of a system that transports finished goods and materials from the Ports of Los Angeles and Long Beach to destinations including Las Vegas, Phoenix, and Denver. Some 80 percent of California’s imported cargo is shipped through the Inland Empire Corridor. Small and medium sized companies across the area depend on this trade lane. In particular, Ventura County is home to over 100 small and medium sized manufacturers that produce supplies for industries ranging from medical and food to electronics, both locally and internationally. The county also has a long oil production history, including support services, which is still active today. Likewise, Santa Barbara County is home to several aerospace and defense companies, including Alliant Techsystems, Channel Technologies Group, Citrix Online, FLIR Systems and Raytheon, which have large operations in the area. Other manufacturing industries which produce in the area include Mentor, a supplier of medical equipment, and QAD, a global provider of software solutions for automotive, life sciences and technology industries. Any disruption to the procurement or distribution logistics of lower tier levels will be felt in the supply chains of larger manufacturers in the oil, aerospace, healthcare, food and electronics industries, potentially in the form of delays and/or higher transportation costs.
According to the National Weather Service (NWS), the majority of southwest California will be at critical fire risk due to dangerous fire weather conditions into at Sunday, December 9. In particular San Diego, Ventura and Santa Barbara Counties may be prone to dry surface conditions combined with resurging Santa Ana wind gusts going into Monday morning, December 11. Such weather conditions could prompt rapid fire growth and extreme fire behavior, as well as downed trees and power lines and potential power outages. Weather experts forecast conditions to ease by Tuesday, December 12, but fire authorities currently expect to only be able to contain the Thomas Fire by December 24. It is thus highly likely to further spread north of Santa Barbara County and cause damage to forest areas, structures, power lines and human health due to toxic smoke. California Governor Brown confirmed on December 9 that devastating wildfires in December would be the “new normal”, calling for more action on climate change to prevent future calamities. Higher ambient temperatures result in snow melting earlier, leading to drier, more flammable biomass in forests – a key factor of this year’s devastating wildfires which spread at a rapid speed. Researches also believe that larger and longer fires may prevent some species from recovering at all, leading to deforestation. An increase in prescribed burns may reduce the danger of larger wildfires; however, this is unlikely as the population continues to move further into forestry areas.