Out of the Whirlwind is a new book by Philip J. Palin that offers a unique perspective on disaster response, resilience, and recovery. It tells the story of how pre-existing supply chains for food and fuel roared back in the aftermath of Hurricane Maria’s catastrophic hit on Puerto Rico. The book tells this story through a combination of data, analysis, and narrative. Implications for future catastrophic events are strategically obvious and operationally challenging.
Homeland Security Today, in cooperation with publisher Rowman & Littlefield, is pleased to offer an exclusive peek into Out of the Whirlwind with a three-part series including an interview with Palin and three excerpts beginning today.
You can order Out of the Whirlwind today and save 30 percent when you use promo code RLFANDF30 on www.rowman.com. Click here for more information.
ESTABAN AND MANUEL, DISTRIBUTORS (Part One of Three)
A Fuel Terminal
On September 20, sun and moon are in conjunction, not even a thin crescent showing. Thursday’s predawn seems doubly dark as Manuel makes the white knuckled drive from his home to the terminal, making several detours before finding a way through the maze of destruction. But the expressway is passable with almost no traffic. The intersection to the tollway is flooded and the next exit too. Fortunately, Manuel is driving his wife’s SUV, not their Mercedes.
At the terminal west of the port, standing water is everywhere, ankle deep or higher in many places. The office roof has partially peeled. The executive offices on five are floating, accounts receivable on four is soaked, and marketing on three is dripping. But the hurricane windows held. As the day-after dawn starts, Manuel assembles his team on the second floor.
“No structural damage to the tanks that we can see. Domes are secure.”
“Normal pipe pressure.”
“One of the generators is running rough. But all are online right now.”
“No cell signal, no land lines, no internet. Our servers are fine, but customers can’t access the purchasing system. No EDT connections.”
Manuel exhales with an involuntary low whistle.
“There are three tankers at the gate. Security says they have paper purchase orders, but there’s no way to digitally confirm or take payment.”
“What about the dock?” Manuel asks. “Can we still off-load?”
“No word yet. I sent Maxie to check and report back.”
“Other than us there’s the five-man night-crew,” the terminal manager reports. “Victor Garcia is still checking the racks, Juan Nieves arrived just as I came upstairs, I sent him to check the propane compound. Brenda is in the lab checking water samples, so far no trace of product leaking.”
The terminal manager’s radio crackles. It is 7:30 on the morning after landfall. Seven tankers are now at the gate. Fewer than usual for a Thursday, but ready to be filled. There is, however, no immediate means available for them to pay. Supply is in place. Fuel infrastructure is intact. But the high-efficiency, high-volume, digital transaction system is missing in action.
One of the truckers has told the guards that their principal competitor’s terminal, less than five miles away, is not expecting to open today.
“What about CORCO? Peerless?” Manuel asks his team.
Heads shake, shoulders shrug. No one knows.
“I can’t imagine Buckeye is open,” Manuel mutters, mostly to himself. There are five major fuel terminals in Puerto Rico. Buckeye is at Yabucoa, immediately adjacent landfall.
“We may be all that’s left,” Manuel says looking out on the seventeen huge tanks. More rain is falling through weak light of a shrouded sun. The usually grassy field is a watery expanse. Safety lagoons around each tank are filled to their brims. White towers rising above the flood, filled with over 80 million gallons of fuel.
Manuel turns to the CFO, “We need a paper process to get the tankers moving through the racks. I can’t imagine we’ll see many more today. But tomorrow… We have to be ready. I should try to call London.”
Manuel has been in the energy industry his entire life. Before returning to his native Puerto Rico as General Manager, he had assignments with two different multinationals in Mexico, Honduras, and Chile. He has dealt with refinery explosions, pipeline spills, and evacuating drilling platforms. On the eve of landfall, Manuel warned his wife this could be different.
“Maria will have an all-island effect. The whole network could cascade. The grid almost certainly, then telecoms, the water system. If damage to the port and roads is too bad, I don’t know how we come back. The terminal could be fine, but without the port there is no flow. With no flow there is stasis. Stasis is death.”
Manuel had briefly considered spending the night at the terminal. Instead he stayed home. After dinner they called their daughters, one in Miami, the other in Madrid. He did not sleep soundly.
From the roof Manuel dials the UK cellphone number for the Managing Director Americas.
“Hola, Manuel. It is good to hear from you,” Duncan’s Scots lilt sings even through this tinny satellite transmission.
“Terminal is good, great given context,” Manuel begins. “Not yet certain about the dock, but pipeline pressure is reassuring.
“At dawn’s first light Landsat gave us a passing peek at the bay and La Curva. Nothing obviously bad. Maritime chatter is tentative, but nothing discouraging. We have usual contacts with Coast Guard. Call back in an hour, I may have more.”
“Hope I do too. One big impediment: No digital transactions.”
“Aha, of course… That’s sticky.”
“Very and our competitors do not seem to be bouncing back. So, I expect tomorrow we’ll have several first-time customers.”
“What’s your thinking?”
“First, we fill our own tankers and get them to every one of our retail stations that can pump. Branded retail has priority. Second, Antonio is jiggering our plans for non-digital transactions. I want to fill every tanker that arrives, prior customer or not. I want to maximize flow. Maybe we give prior customers their own lanes, but we serve everyone.”
“What are your principal risks?”
“Near-term is resupply. Longer-term is cash-flow. Without resupply, I am accelerating toward full-stop. Then, instead of payments made before each tanker leaves the terminal, we are going to have a mess of paper, months of invoicing, contentions with long-time customers, deadbeats who never pay, and lots of legal fees.”
Duncan laughs, “So, your biggest worry is me. Will I get you resupply, and will I punish you for a job well-done? There’s plenty of resupply already in the water waiting to enter port. Did the jetty survive? Can we restart flow? We don’t know yet, but I bet yes. Then regarding cash-flow—may that fierce god bless us all—real concern. But a rare benefit of being but one bluish vein in the huge hairy beast of our employer, is the super-abundance of cash-flow. Whatever your loss-of-flow these next few months, the beast will still rampage. More importantly – more seriously – you and I both know two things: First, this is a fantastic opportunity to claim market share. Second, it is the right thing to do. Not often in our lives are we given the chance to do so well, by doing good. Glad you’re there to make it work. I’ll do my job. You do yours.”
That brutal day-after only sixteen tanker trucks arrive at the gate. Manuel’s team fills and releases all of them. But without digital transactions, the typical service rate of 55 minutes gate-in to gate-out is nearly doubled, all the additional time required to record identity and document transfer of custody. The new purchasing process is refined and accelerated by Friday, but not including the actual fill, still takes nearly four times longer than the prior digital system. Then starting Monday—and continuing for the next four months—the number of tankers arriving to load fuel far exceeds any prior record. Increased demand with slower supply is the wrong direction.
On Monday mid-morning there is a line of tanker trucks extending two-blocks in front of the gate to the tollway access road, then nearly to the toll-way intersection. Police cruisers wait to give each filled-tanker an escort. There is flow, but profoundly congested. Each small delay accumulates: narrow access, drivers unfamiliar with these racks, on-the-fly transaction processing, a grocery truck stalls on the ramp to the toll-way fuel tankers stuck behind… Viewing the back-up from his sodden fifth floor conference room Manuel unconsciously, quietly whistles Strozzi’s melancholy Che si può fare… loses the melody and morphs into the Godfather theme.
HST Interview: ‘Out of the Whirlwind’ Come Valuable Lessons on Supply Chain Resiliency
