Franziska Nothofer: Good afternoon. Thank you for joining today’s Situation Brief on how to navigate this year’s peak hurricane season, and the lessons learned from Hurricane Katrina, which unfolded 20 years ago. I’m joined by our two presenters, Jon Davis, Chief Meteorologist here at Everstream, joining us from London today, and Mark Russo, Chief Science Officer joining us from Chicago.
They will walk us through the latest updates on this topic and highlight potential impacts on supply chains that leaders should be aware of. If you have any questions during the session, please just drop them in the q and a box at the top of the GoToWebinar panel and we’ll address as many as we can towards the end of the session during the q and a part.
With that, we can get right started and I’ll turn it over to you, John. Thank you.
Jon Davis: Thanks, Franzi, and welcome everyone. So typically we tend to do a hurricane update at this time of year, and we chose this specific week for this year for two reasons. Number one. It is the 20th anniversary of Katrina, hitting the Gulf Coast of the States, specifically near and just to the east of New Orleans.
Literally, it’d make landfall 20 years ago tonight and, uh, had devastating impacts. We thought we would take a little bit of a look back of Katrina and talk about, you know, what that meant from a supply chain standpoint. What has changed since then and get into some of the details, and of course the other reason to do it at this time of year is that we are nearing the halfway point of the season, so it’s getting pretty close to halftime of the 25 season in the Atlantic Basin specifically.
Into areas of the Atlantic Basin. Early September is the true middle point, but we’re pretty close to that timeframe right now. So because of the 20th anniversary of Katrina and the fact that we’re nearing the halfway point. That’s why we chose to do this, uh, update and webinar at this point of the overall season.
So let’s take a look and, uh, kind of take a look back 20 years ago of Hurricane Katrina. You know, certainly a devastating storm that is still talked about today, 20 years later. This is the overall track of Katrina. And of course, after it moved. Through Southern Florida is a relatively weak storm. Then it gained rapid intensification, you know, developed into a category five hurricane in the middle of the Gulf of Mexico, one of the most rapidly intensifying hurricanes we’ve seen across the Gulf of Mexico.
Then of course, it made landfall. In Louisiana again, literally 20 years ago here today, and had devastating impacts along the Gulf Coast and in many inland locations here overall. So some of the statistics from Katrina, of course, it was 20 years ago, maxed out as a category five storm in the Gulf of Mexico, even though it officially made landfall is a category three storm, but just prior to landfall.
If it was a Cat four and five. The maximum winds of Katrina in the Gulf of Mexico were 175 miles an hour. And of course, some of the statistics for people were just devastating. Over 1800 fatalities. That is the second highest in history, only surpassed by the hurricane in Galveston, around 1900, where about 10,000 people, you know, lost their lives.
But this is number two. And from a economic loss standpoint. It is the highest in history still to this day, $167 billion in losses overall. So when we think about the impact of Katrina, you know, on supply chains here, overall, um, this was by definition the Black Swan event, you know, really devastating for areas along the Gulf Coast areas.
It impacted pretty much all sectors that the supply chain industry is about and that, you know, we work with here overall. You know, some of the statistics here, you know, from the storm, you know, especially in New Orleans. Where 80% of New Orleans was underwater the day that Katrina made landfall and some areas stayed underwater for, you know, over a month.
And one of the implications there was the longer term impacts on demographics. New Orleans has never totally recovered from this storm, from a population standpoint. You know, some of the areas, the tourist areas like. The French Quarter and you know, downtown, you know, it didn’t have a huge impact, but the neighborhoods have never recovered here just because it was so devastating across the region and likely never will recover overall outside of the demographic impacts.
From a standpoint, in Orleans specifically, we had major disruptions to transportation. You know, all forms port. Road rail air major impacts to energy and agriculture within areas in the Gulf of Mexico, along the Gulf Coast and in inland locations. Overall, certainly major impacts to manufacturing and distribution.
And then from a standpoint of retail and consumer goods, there were disruptions that went on for years, if not toward a decade overall and. Some of the items in looking back at Katrina of this Black Swan event is that the storm really expose how vulnerable or fragile global and national supply chains can be and.
Maybe, you know, across the states and you know, into the Southern us, especially Gulf Coast, maybe things had gotten a bit complacent for a while. We hadn’t had a storm like this in a long time, and this really kind of changed the overall game, if you will, as to how we look at overall natural disaster events and how it, you know, impacted the entire supply chain in every facet of this and how devastating it was here for months and years.
Even up to a decade in some areas overall, and one of the things that happened is that it really catalyzed the long-term changes in supply chain risk management. It kind of changed the game, if you will. And so from that point on. Because the storm was so devastating and had such disruptive impacts across so much of the, you know, southern US and the economy of the us, certainly it led to more robust contingency planning.
Thinking about if something like this happens again, how do we plan ahead? And that’s something that really wasn’t done before that here overall. And then finally it showed the importance of logistics, agility. Being ready for events like that, you know, infrastructure, resilience, how do we build the infrastructure out there and the public private coordination together, you know, that kind of began to increase that.
And you know, the kind of things that we do at Everstream with Alan overall and that kind of, you know, public private partnership overall to help. Companies to help people, you know, in times of need when we have a storm like this, or other natural disaster, not only in the states, but also on a global scale here overall.
So some kind of the lessons learned, and it certainly was again, a black swan event and it kind of changed the way that we look at. Overall, you know, supply chain, you know, planning and supply chain risk management, especially from a, you know, proactive standpoint. Becoming prepared ahead of time here overall.
So let’s now, you know, after 20 years of Katrina hitting the Gulf Coast, let’s now kind of, you know, talk about the situation from a standpoint of, of this year and you know, where we’re at. So the second reason we had this webinar this week is the fact that we’re getting pretty close to the halfway point of the season.
So this is in the Atlantic Basin. Which includes the Gulf of Mexico, the Caribbean, the Tropical Atlantic. These are all the tropical storms and hurricanes, um, that, you know, from a historic standpoint. So you can see the distribution of when they tend to occur. So the black line is today. So you can see we’re getting into the, toward the most active period coming up and the true midpoint.
Of the season in the Atlantic Basin, it’s like September 9th or 10th. So we’re kind of coming on that here pretty fast. So what we’d like to do is, number one, talk about the first half of this season. Then most importantly, talk about the second half and what we’re looking at. What we’re thinking that how things will play out.
Is there more or less risk in the second half of the season? And then what areas tend to be the locations that will tend to be the highest risk here overall across areas of the Atlantic Basin. So let’s talk about the, uh, the first half of the season. So as we kind of approach the first half here are all of the storms that we’ve had so far.
You know, most of them, and we could look at some of the stats here of this first half of the season, is that most of the storms have been relatively weak. We have had six tropical storms named storms, if you will, but only one. Has been significant. That, of course, was Hurricane Aaron. That was the first hurricane of the season, the first major hurricane of the season, cat three and the first category five hurricane of the season.
Overall, you can see the track of Aaron from off of Africa, curving north of the Caribbean, and then curving off the East coast here. Overall, this was an amazing storm in many, many ways. Rapid intensification of the storm, the first Cat five in the Atlantic, the earliest Cat five in the Atlantic, not the Caribbean or the Gulf, but in the Atlantic ever recorded.
And the fact that it had such a long track, you know, and had such a long history with it, really amazing. The other amazing thing about Aaron is the fact that it didn’t hit any land areas directly. Didn’t hit the Caribbean as north of those islands, didn’t hit Bermuda, didn’t hit the East Coast. It was really an Atlantic storm overall.
It had some minor impacts on some areas, but you know, in this kind of a situation, if Aaron would’ve taken a different track into the Caribbean, hitting the east coast of the States into the Gulf of Mexico, with its history, with its large diameter, with its incredible strength. It would’ve been the kind of storm that we could have talked about for 10 years, you know, talking about Aaron, but we’re not gonna talk about this because it was over the open waters here.
And it certainly goes to show in this kind of a situation that overall here, you know, the, the role of luck. Circumstances very important. In a somewhat different track, let’s say further south or hitting the East coast, this would would’ve been a major disruptive event. For areas, companies, people, supply chains here in general, across those areas.
Overall, and you know, certainly Aaron is the big deal in the first half of the season didn’t have any impacts, but if it would’ve taken a different track, it could have had huge impacts here out there Overall. One of the things that we look at, and we’ll talk about more in this presentation is ACE accumulated cyclone energy.
The true measure of how active a season is, and almost all of the ace is from Aaron because it was such a strong and long left storm overall. So the current level of ACE is we near the halfway point is 39. That compares to the normal at this time of year of 30. So for this season up to today. Overall ACE or accumulated cyclone energy is 29% above normal.
And overall, so it’s been in more than normal active season, all because of air in here overall and how strong the system was here, you know, from this point overall across those areas. So that’s kind of a recap as to what’s happened. The first half obviously looked at Katrina and the impacts 20 years ago.
I’m gonna turn it over to Mark and we’ll now take a look at, well, what’s ahead for the second half of the season here. Upcoming Mark.
Mark Russo: Well, thank you John. Uh, before getting into the details here with the remainder of the hurricane season, wanna take a step back and just look at what’s our preliminary forecast back in the early portion of May when we.
Issued it. And so these are the main takeaways and um, couple of key items. Number one is that of all the Northern Hemisphere basins, we expected the Atlantic Basin to feature the highest risk and within the Atlantic Basin, our ACE forecast for the season as a whole look to register near normal or just slightly above normal within the US coastline risk being having slightly higher.
Odds compared to climatology of being impacted, but by more significant storms. Uh, lastly, we’re not expecting as active or extreme of impact season compared to a year ago, which featured, uh, storms such as Barrel and Helene and Milton in the us and overall with our initial expectations. Bottom line, there has not been really any surprises, if anything, from a surprise standpoint up to this point.
The biggest surprise has been with Hurricane Aaron that it did not impact any land areas. You know, it achieved category five status. It was a very impressive storm, but as John mentioned, because of circumstance, because of atmospheric patterns at the time. It stayed out to sea and did not impact directly any specific land area.
So let’s get into the details here for the second half of the season, again, with what we’ve been expecting, kind of the, our, our main drivers here of the pattern, we tie a lot of this to sea surface temperatures and that, how that impacts, uh, the fuel for. Tropical cyclones as, as well as, uh, producing, uh, wind shear or a lack thereof across the Atlantic Basin.
So let’s take a closer look now at the details with our key drivers. We’re gonna focus on three main areas, our La n. First, let’s discuss our La Nina area across the Equatorial Pacific. Again, that’s a key area, um, in the Pacific that helps to drive wind shear in the Atlantic Basin. And when Lan Nina is in is in place, which we’re now beginning to transition to Lan Nina in the Equatorial Pacific meeting, that there are cooler than normal water temperatures there across the Equatorial Pacific in that box that you see on this global SST map.
So that essentially reduces wind chair. Across the Atlantic Basin, uh, which just increases the odds of more tropical cyclones or hurricanes developing and even raises the potential of those storms becoming stronger storms here. If anything in terms of, again, big changes, uh, our initial expectations was that we would be kind of on the border of neutral or La Nina conditions.
And if anything that has sped up maybe a little bit more. But we do, and, and because of that, we do think that that’s important. Now, as we go into the heart of the hurricane season and for the second half of the season, the fact that. Transitioning to La Nina again, that does increase the risk here of more storms here coming up here.
And then in terms of sea surface temperatures in the main development region, the MDR that you see in that box in the Eastern Atlantic, uh, that is currently warmer than normal, and it’s been that way here if anything’s become a little more anomalously warm as we’ve gone through this first half of the season, and that’s also pointing towards at least better.
Set up or conditions here for the development of tropical storms and hurricanes within this area. Again, the key pathway of tropical waves that come from Africa across the Atlantic and then create heightened risk of of, of, um, uh, disruptions in North America and across the Western Atlantic Basin in general.
And then lastly. In the Caribbean and closer to the us the Gulf of Mexico, water temperatures are anomalously warm, and that is something to watch as we go into the heart of the season and beyond. With, again, more warmth with water temperatures, more fuel. For tropical cyclists to intensify and become, uh, rapidly intensify and to become stronger than normal, even able to maintain their strength further up to the north as storms traverse these specific areas.
So quantifying some of the anomalous warmth in our. Development areas here in the Atlantic Basin. Let’s provide an update first on the Atlantic Main development region. Again, we showed this in our initial presentation back in May, and one of the key headlines was not as warm as what was the case a year ago, but still slightly warmer than normal, and that’s still the same situation today as you see on this chart, running warmer than normal, but not to the levels of last year or even for that matter, two years ago.
Because things are warmer than normal, uh, again, that does at least provide more fuel for storms to develop and intensify and with what occurred with Hurricane Aaron achieving category five status in the earliest category five in the Atlantic. This is one of the primary reasons for this. And then in the Gulf of Mexico, uh, this is a key item here again for the remainder of the season within the Gulf of Mexico.
Current waters are anomalously warm, not quite as warm as the past two years, but still the third warmest of any year. Going back to 2000. And also that points in, um, at least, you know, normal to, uh, more than, uh, active, uh, normal conditions here, um, in the Atlantic Basin and does raise the risk of storms, uh, strengthening and increasing the odds of more impactful storms impacting the Gulf Coast here.
Uh, potentially coming up for the second half of the season. So overall, again, when we look at things from an A standpoint, uh, which is a true measure of risk or accumulated cyclone energy, which takes into account not only the number of systems, but their intensity and their duration. Again, last year was, uh, just slightly above normal, but you did have some key big storms, which created just havoc.
Big disruptions, uh, for people, places, and, um, supply chain networks. And based on everything right now, uh, we are expecting. With sea surface temperatures and with the La Nina in place, we are expecting near to slightly above normal ace again, which has been the trend over the past 10 years or so, where that risk is higher compared to decades.
Um, you know, several decades, uh, ago here. So bottom line here, in our late August update, we really have not changed anything. And what was, what were our initial expectations have basically held? And the key takeaways, number one, is that from an Atlantic a standpoint, we continue from the basin as a whole.
Uh, near normal ACE forecast with a range of one 30 to one 50, but specifically the US coastline, whether that’s East Coast or Gulf Coast, and that extends down into the Central America coast as well, is that the probabilities of more significant disruptions is slightly above the long-term average or climatology.
And then for the second half of the season, even though currently there is a bit of a low. In tropical activity in the Atlantic Basin, we are expecting a more active second half of September and into early October basis some of the signals that we’re seeing, whether in longer range computer model guidance or in some of the atmospheric patterns here evolving over the next few weeks.
So that is gonna be a key item to monitor here in terms of risk of being disrupted by tropical activity. As we get into later in September and into early October. And lastly here, key items to watch include the anomalously warmth across the Gulf of Mexico. And again, even with, um. Later in the season, if water temperatures remain warm, that could push the season a little bit later than what it normally, um, you know, how it normally ends here.
So, as we move into this mo active stretch here of the Atlantic hurricane season. Businesses face elevated risks to supply chains, logistics and procurement, and ultimately, proactive planning is critical to reduce storm driven disruptions and ultimately to protect people, products, and continuity. And with the heart of the hurricane season, certainly demanding visibility, flexibility, and prepositioning of people, uh, and or products and companies that are prepared with alternate logistics or secured supply.
And integrated storm intelligence and insights will certainly minimize disruptions and protect their employees. Their operations and their customers. And here at Everstream, we provide end-to-end risk management with our platform. Our insights, our expertise in our advisory services. So whether it is a general forecast, track of storms, whether it’s storm related incidents, um, uh, that’s all, uh, integrated into the platform.
And, uh, risk scores, alerts, and insights are all provided in that. And then our forecast and focus recordings cover high level tropical risks. But we do offer storm briefings with numerous customers as well. And also in the event of a high risk, high impact storm event here, uh, we will provide daily situational briefs here coming up.
So depending on, um, if we get to that point in the season. Ultimately we will be providing more expertise and insights into the risks here, specifically to, uh, supply chain networks here within North America or even other areas around the globe, depending on whether there’s typhoon activity in like the Western Pacific.
But, uh, certainly, uh, we will support you with, um, uh, the full kind of, you know, risk distribution here, uh, within your network, uh, basis. Uh, the risks here at hand. So with that, um, turning things back over to, uh, Franzi, uh, with, uh, any questions that anybody has.
Franziska Nothofer: Thank you for the in-depth briefing. Mark and John, we’ve had a few questions come through from our attendees and the first one is a great question.
Aaron was a category five storm. Will there be another category five storm this year? Hmm.
Jon Davis: That That is a great question. Yeah. So if we look back over recent times, the last six or eight years in these environments that have been pretty favorable for intensification, we’ve had numerous seasons with two, you know, category five storms.
The fact that we’ve had already had one Aaron in the middle of the Atlantic. It didn’t cause any disruption, but it was a category five storm. You know, you still have the potential of another category five storm, and we would call that potential, you know, there’s a climatology level, right? A normal level of getting a category five storm.
You know, the tail of the distribution, if you will. We would call that above climatology, more likely than not from those lower hair levels, but the mere fact that we’ve already had one. Aaron, you know, it doesn’t really diminish the fact that we could have another, you know, category five, or in the very least, a major, you know, hurricane three, four or five, you know, upcoming.
Especially with some of the favorable conditions that we just talked about, you know, and in different areas, especially the Gulf of Mexico with as warm as waters are across that area here. Overall, that’s an area that we’re watching very closely in the second half of the season. But yeah, super good question.
Franziska Nothofer: Thank you, Jon. Let’s dive into the next question. How has the West Pacific typhoon season been this season? Any surprises? And will this change coming up?
Mark Russo: With the Western Pacific typhoon season, it has been quieter than normal, uh, which was expected going into the season. Uh, typically when you have these kind of neutral to La Nina conditions across the Equatorial Pacific, that actually reduces tropical development of typhoons in the Western Pacific. Now, there have been.
Some impactful storms this season, uh, including, including tropical cyclone, uh, dannis, uh, which impacted Taiwan and parts of southern China. But in terms of ace and in terms of the numbers of typhoons, uh, it has been, uh, pretty quiet here. Up to this point, and we expect this to continue. Uh, looking out for the second half of the season across the Western Pacific, again, of all the basins, uh, around the Northern Hemisphere, just the highest number of tropical system.
It’s normally the Western Pacific, but compared to normal, um, we do expect, uh, at least a below average a season and, and, um, you know, when all is said and done here. So that does include the, the second half of the season coming up for the Western Pacific.
Franziska Nothofer: Wonderful. Thank you, mark. Mark, great questions are still coming in and we have time for one or two more.
So the next one is, what industries are most vulnerable to disruptions during hurricane season and how can they build resilience?
Jon Davis: Yeah, from, from a standpoint of industries out there, you know, is we’re looking at, you know, different areas along the Gulf Coast, in Central America, on the east coast here.
Overall, certainly a couple come to mind. The energy, you know, industry, especially in the Gulf Coast and in the Gulf of Mexico, whether it’s offshore. Or onshore. Some of that on the coastal areas is always in a relatively vulnerable position. So energy probably would be top of the line in that situation here overall.
And then other business units, you know, other industries overall, you know, you’re certainly dealing with agriculture. Very, very important. The pharma industry, very important, especially kind of honed in on Puerto Rico, but also into areas of Florida and interior areas of the Southeast. And then once we get beyond that, then you know, all of the kind of industries that have exposure and whether that’s dcs, whether that’s facilities here, you know, toward the Gulf Coast, toward the East Coast, and.
You know the effects that you’d have with any kind of tropical activity, but energy would be number one. Agriculture, obviously huge, you know, overall both transportation and, and crop wise, and then kind of all the other industries farmers right up there, but then kind of all the other industries that have any exposure, you know, toward the coast of the Gulf of the East Coast, into Florida and into the Caribbean overall.
Franziska Nothofer: Perfect. Thank you, Jon. So we’re almost at time. A big thank you to our speakers today and to all attendees for joining us. We will get back to you one-on-one on any questions that we couldn’t get to during the session today. And if you’d like to get in touch with our experts directly, please email [email protected].
You’ll also receive today’s recording straight to your email inbox within the next 24 hours. Have a great day. And evening, depending on where you’re dial in from, and see you soon and goodbye.