Of all the types of risk that can impact supply chains, perhaps risk of natural hazards is the most harmful because there is little that can be done to control or stop the full brunt of mother nature. The evidence for how damaging a natural disaster can be in the United States is sobering.
- The damage done in 2011’s Mississippi River flood in Memphis TN, compares closely to the Great Mississippi and Missouri Rivers Flood of 1993, which caused $15 billion in damages and affected 320,000 square miles.
- In 2017, weather and climate-related disasters cost a record $306 billion, according to the U.S. National Oceanic and Atmospheric Administration.
- In March 2019, a “bomb cyclone” storm that for weeks flooded major grain producing farms in multiple mid-western states, occurred just before the start of planting season with damage costing about $3 billion.
- During the California wildfire season of 2020, transportation disruptions threatened west coast shippers as conditions escalated significantly and included multiple fires in central and northern parts of the state, according to Resilience360.
To help understand the nation’s communities most at risk of natural hazards, FEMA, collaborating with partners in academia, government, and private industry, has developed the National Risk Index. The Index combines multiple hazards with socioeconomic and built environment factors to provide a risk measurement for each United States county and census tract for 18 natural hazards, based on:
- Expected Annual Loss, a natural hazards component, represents the dollar loss from building value, population and/or agriculture exposure each year due to natural hazards.
- Social Vulnerability, a consequence enhancing component, is the susceptibility of social groups to the adverse impacts of natural hazards, including disproportionate death, injury, loss, or disruption of livelihood.
- Community Resilience, a consequence reduction component, is the ability of a community to prepare for anticipated natural hazards, adapt to changing conditions, and withstand and recover rapidly from disruptions.
According to a story in Scientific American, there are surprises with the Index, such as Bronx, N.Y. being rated as the county with the highest tornado risk, way ahead of “tornado hot spots in the Great Plains and the Southeast.” The reasoning: even though tornadoes in the Bronx are rare, the destruction level is quite high due to the county’s concentration of people and buildings.
When determining the risk score for the census tract where I live and work, Henderson, NV, no surprises were discovered. The overall risk index score was “very low,” A “relatively moderate” score was given for earthquake risk, and heat wave and wildfire risks both scored “relatively high.”