The U.S. experienced 24 weather and climate disasters, each causing losses exceeding $1 billion, in the first 10 months of 2024. In 2023, there were 28 such events—the highest annual disaster count in the 44 years the federal government has been tracking such occurrences.

Extreme weather events and non-weather-related disruptions, such as labor strikes, pandemics and geopolitical tensions, threaten transportation networks and the smooth operation of supply chains. Hurricane Helene, to cite just one example, in September destroyed a section of Interstate 40 at the Tennessee-North Carolina border and will take months to repair. The stretch of highway that was damaged supports about 7,610 commercial trucks daily, according to published reports.

Navigating these challenges effectively requires proactive and resilient strategies, advanced technology, and a strong crisis-response framework.

A shipper does not operate in isolation. It’s intertwined in a complex web of suppliers and customers. A failure of one of the nodes in the supply chain can have a domino effect — a loss at a single point in the chain, such as a tornado damaging a contract manufacturer’s plant — causes other nodes to be disrupted as well. Although supply chain risk is not a new risk phenomenon, companies still struggle to manage and accurately assess their risk exposures. Supply chain disruptions cost organizations an average of $184 million annually.

As organizations continue to wrestle with multiple risks associated with climate change and geopolitical turmoil, there’s an urgent need for a more rigorous and anticipatory approach to risk detection and mitigation. This includes identifying possible sources of transportation risks, such as natural disasters, road closures, fuel shortages and demand fluctuations. Regular risk assessments can help evaluate the likelihood and severity of each risk and prioritize the ones that require more attention.

The next step is to analyze your transportation network and identify the critical nodes, routes, and modes that are essential for your operations. You should also identify the network's interdependencies and vulnerabilities, such as single-source suppliers, bottleneck points or a lack of alternative options.

The third step is to define two to three contingency objectives. What is absolutely critical regardless of what happens? Is it meeting delivery deadlines and maintaining customer satisfaction? Or is it efficiency and asset utilization? Whatever those criteria are, make sure your team members and stakeholders are aligned with your priorities. Collaboration with carriers, suppliers and logistics providers is essential to ensuring better communication, fast decision-making and deployment of shared resources during disruptions.

The final step is to develop contingency strategies and actions, which are the specific steps that you will take to mitigate and overcome the transportation risks. Relying on a single route or mode of transportation increases the risk of severe disruptions. Diversifying shipping strategies reduces concentration risk by providing alternative options when primary routes are compromised. 

Strategies for diversification include:

• Identify and pre-plan alternative routes for land, sea, and air transportation.
• Combine modes of transportation, such as rail, truck and air, to ensure flexibility and speed.
• Distribute inventory across multiple locations to reduce dependency on a single hub.

Strong partnerships with carriers and third-party logistics providers are vital to executing preventive strategies and managing responses in times of crisis. Extreme weather events often lead to increased fuel prices and higher trucking rates, causing shippers’ operational costs to grow. If a storm is on the horizon, 3PLs can pre-purchase capacity and pre-position trailers and other equipment outside of the affected areas so that companies are ready to act as soon as roads are clear. Their relationships with carriers, warehouses and strategic vendors helps to manage transportation costs when capacity is tight — better than you could as a stand-alone shipper. 

The goal of contingency plans is to elevate transportation considerations into strategic decision-making, deliver operational resilience when faced with unexpected disruptions, and minimize potential losses. Technology plays a critical role in risk mitigation. Having information in near-real time about transportation networks allows shippers to take action rather than spend time figuring out what to do.

GPS and internet-of-things-enabled sensors enhance the visibility and tracking of shipments and conditions in both trucks and containers. Artificial intelligence and predictive analytics can identify potential weather events and plan alternative routes. Data integration platforms centralize data for better decision-making during emergencies. And centralized communication platforms provide tools that enable collaboration between shippers, carriers and suppliers. Through regular analysis of shipping patterns, pricing optimization and asset utilization, shippers can identify opportunities to improve contingency plans and disaster recovery.

Extreme weather events and other disruptions are inevitable, but their impact on shippers can be mitigated with strategic planning and proactive measures. By investing in technology, building strong partnerships and fostering resilience, shippers will not only weather any storms, but emerge stronger and more competitive in a rapidly evolving global landscape.

Brian Dean is president of managed transportation at RXO.