CHICAGO — Preparing for disaster is no easy task, and while metal distributors can take certain measures to help mitigate losses—having flood, hazard, business interruption insurance, generators and remote Internet servers—it’s not enough to cover the cost of business for a lengthy period.
"Business interruption insurance is great, but in most cases it doesn’t cover sales," Lisa Goldenberg, president of Delaware Steel Co., Fort Washington, Pa., said during an AMM-led roundtable at an Association of Steel Distributors meeting in Detroit.
In the wake of Hurricane Sandy, the Oct. 29 storm that wreaked devastation across 20 states, "businesses were not shut down merely for a day or two," she said, noting that her company—although far from landfall—was shut down for five-and-a-half days due to power outages and local flooding.
The federal government reported fourth-quarter gross domestic product fell 0.1 percent after rising 3.1 percent in the third quarter, but didn’t provide any assessment of the storm’s possible influence.
"Just look at the top 50 manufacturing companies (on the East Coast). They were inoperable for at least a week. No checks. No payroll. You couldn’t access the bank. You didn’t receive mail. You could go to the post office—those that weren’t under water," Goldenberg said. "So looking at data in the fourth quarter for that region, (although) I’m not an economist it doesn’t seem that hard to me to figure out" there had to be some negative effect.
Although Americans tend to focus on the positive and under-plan for emergencies, "you would have thought that post-9/11 and post-Katrina we would have prepared more," Goldenberg said.
"Preparedness is a giant, giant issue. My friends who run sheet yards and precision blanking lines were handing bundles out to guys lined up to load trucks. They had no power, which means no slitting, no leveling, no cranes, no forklifts, no heat. They couldn’t write up an order other than to buy a tablet. They told customers, ‘I’ll bill you next Tuesday or give me cash,’ " she said.
"So how do you prepare? It is so much bigger than that. We looked at having our computers up in the cloud, remote servers and better remote access so people can work somewhere else. We gave our people gas cards so they could get fuel. We set up carpooling and did work old school (pre-wired)," she said.
The bottom line: whether it’s for bad weather, terrorism or a banking crisis, "we need to invest in infrastructure and security. We are pretty vulnerable. I don’t know of anyone who keeps enough money under the mattress to run their business," she said.