Hurricane Helene made landfall on September 26 as a Category 4 storm in the Big Bend region of Florida’s Panhandle. Though it weakened to a tropical storm following landfall, its conditions stretched from northern Florida through Georgia, the Carolinas, and Tennessee, and included intense winds, flooding rains, and a life-threatening storm surge. A major inland flooding event occurred in the Appalachian Mountain regions of western North Carolina and eastern Tennessee due to unprecedented rainfall volumes and the force of overflown, downstream rivers. Logistics disruptions in the path of the storm were widespread, including port closures, suspended airport operations, and ground disruptions due to flooded roadways and fallen debris blocking the passage.
Agricultural losses in Florida and Georgia are expected, though it will take weeks before crop damage estimates can take place. Some of the most-affected areas sustained infrastructure damage and power outages that have had lasting production impacts, including indefinite stoppages and force majeure declarations that have not yet been lifted. Despite Helene making landfall in northern Florida, the Carolinas were disproportionately affected by related production halts at supplier facilities. This has caused ripple effects through critical sectors in the U.S. and beyond, as industrial manufacturing relies on continuity of supplies and inputs from these areas.
Impacts to production from Hurricane Helene reach various sectors
Everstream Analytics reported 55 production disruption incidents linked to the impacts from Hurricane Helene. While most of the logistics disruptions like port and airport closures were temporary, resolving after the storm’s passage, many of the production disruptions have been prolonged due to power outages or longer-term issues like damage to facilities or equipment. In some cases, inaccessibility at affected facilities due to roadway damage or bridge collapse has delayed damage assessments and restoration efforts.
Production disruptions have been reported in some states that were not within the storm’s affected area due to shortages of inputs or components sourced from the impact zone. This was the case with General Motors (GM) assembly plants in Flint, Michigan and Arlington, Texas, and a Volkswagen assembly site in central Tennessee. Both GM plants have since resumed production after several days of supply shortage stoppages, while Volkswagen plans to remain closed until October 8. Nearly half of the reported production incidents took place in affected areas in western North Carolina with a cluster in towns surrounding the city of Asheville; namely, Arden, Fletcher, Spruce Pine, and Mills River. The Carolinas accounted for over 70% of reported incidents, with South Carolina impact clusters in the Greenville-Spartanburg corridor.
The affected area in western North Carolina is home to a diverse range of industrial activity including electronics, automotive, and aerospace components manufacturing, general machinery and material processing, and medical device and equipment suppliers. The latter has been particularly impacted by a continued operational shutdown at Baxter International’s North Cove facility which supplies critical healthcare products to U.S. hospitals and medical centers, including 60% of the country’s supply of intravenous (IV) and peritoneal dialysis (PD) solutions. Operations at Baxter have been suspended since September 29, and while clean-up efforts are ongoing, no timeline for operational resumption has been shared due to infrastructure damage that has complicated site access. U.S. healthcare providers have already received guidelines for navigating imminent shortages of medical supplies, including working with the U.S. Federal Drug Administration (FDA) to secure alternative supplies through imports and conserving stockpiled inventories through a triage process.
Global electronics manufacturing was also at risk of disruption from the effects in North Carolina, as the Spruce Pine Mining District is the world’s largest supplier of high-quality silicon quartz material used in semiconductor and integrated circuit manufacturing. Though the Quartz Corporation halted operations on September 26, it has since reported that it does not anticipate high purity quartz supply disruptions as it maintains a high level of feedstock at its processing plant in Norway. Further, while mine owner Sibelco North America Inc. declared force majeure on its quartz output in Spruce Pine, it has since confirmed only minimal damage.
The affected area in South Carolina is home to several automotive components manufacturers reporting disruption. This includes fender and bodywork supplier, Long Tube Headers, battery systems producer Proterra Inc., and alternator supplier, JsAlternators. While Long Tube Headers was able to resume production on October 3, the latter two suppliers have not yet reported expected resumption timelines due to site damages incurred from flooding. Though an unconfirmed link, it is possible that the two affected General Motors assembly sites or the Volkswagen assembly site in Tennessee depend on inputs from these parts suppliers. Other notable impacted sites in the area include Milliken & Co. which manufactures specialty chemicals out of its Spartanburg headquarters, and Edgewater Automation which produces automated assembly and test systems for the automotive, electronics, and life sciences sectors.
Everstream clients are receiving more detailed insights and recommendations about this risk.
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