Impact of Disasters on the Impact of Disasters on the Transportation SectorTransportation Sector
Ralph Petti, MBCI, CBCPRalph Petti, MBCI, CBCPPresident, Continuity First, Inc.President, Continuity First, Inc.
Member, North Carolina Chamber of CommerceMember, North Carolina Chamber of Commerce
North Carolina League of Transportation & LogisticsNorth Carolina League of Transportation & LogisticsAnnual Conference – Myrtle Beach, SCAnnual Conference – Myrtle Beach, SC
June 22, 2012June 22, 2012
•Welcome/Overview• Credentials
•Disasters • Major global disasters• Affecting global transportation – and you!
•Transportation Sector• Transportation issues faced• Increasing supply chain trends
•Preparing for Disasters• What are the options?• What can you do about it?
•Next Steps• Business Impact Analysis• Gap Analysis• Understanding the consequences
AgendaAgenda
About Continuity First, Inc.About Continuity First, Inc.• Incorporated in April, 2005 by executives of industry-leading firms• Many team members have 30+ years of disaster planning experience • Headquartered in the Richmond, Virginia area• Regional offices throughout the United States• International clientele in Central America, Southeast Asia and Europe• SBA “Small Business/Woman/Minority Certified (SWAM)”• Extensive team of certified Business Continuity experts• Focused on Public- and Private-Sector Collaboration• Award-winning team with recognition from Sen. Mary Landrieu (D-LA) for
our efforts to train and recover citizens of The Gulf Region from disasters
• Member, North Carolina State Chamber of Commerce with clients and partners in over two dozen N.C. counties and gov’t agencies
As you all well know…As you all well know…
Every company relies on some form of transportation to conduct their business and transportation is a
key part of the world’s critical infrastructure,and…
It is difficult for companies in the transportation sector to respond when major roads, airports and shipping lanes
are closed and supplies are needed most critically.
However, most companies do not have a testable plan for: “Disaster Recovery” – backing up their data and networks“Business Continuity” – identifying specific business processes
< This becomes a major area of concern for all involved >
Continuity First - Global ReferencesContinuity First - Global References
Definition of: Definition of: A Disaster
“The result of a hazard impacting a community”
Source: Federal Emergency Management Agency (FEMA)
TSA’s MissionTSA’s Mission
Transportation Security Administration (Homeland Security)
“The Transportation Security Administration protects the Nation’s transportation systems to ensure freedom of movement for people and commerce.”
(TSA, Mission, Vision, and Core Values, accessed November 17, 2007
Source: Federal Emergency Management Agency (FEMA)
Key USA Disaster Recovery StatisticsKey USA Disaster Recovery Statistics
•93% of Americans are not prepared for a disaster at home
•61% of all small businesses do not have a plan at all.
•40% of all businesses that do not have a disaster plan will go out of business within two weeks of a disaster event.
Source: Federal Emergency Management Agency (FEMA)
“Businesses MUST prepare themselves…” - US Department of Homeland Security
Disaster events in 2011Disaster events in 2011• Nationally
– Hurricanes – Gulf, Eastern – Tornadoes – in 30 States!– Earthquake – Northeast– Fires – Pacific/Southwest– Ice Storms – Northeast/Midwest– Flooding – Midwest/Cedar Rapids:’08– Drought – Southwest/Midwest– Power Outages – Everywhere and…. – Fukushima – A “BLACK SWAN”
• Earthquake• Tsunami• Nuclear Compromise
Major Global DisastersMajor Global DisastersCrisis Year Crisis YearTornados in AL, MO and MA?
2011 Islamabad Bombing
2008
Support Flight Accident
2010 Airline Flight 3054 2007
Major University Crisis Response
2010 Gulf Coast Hurricanes
2005
Haiti Earthquake 2010 Brookfield Shooting
2005
So. AmericanEarthquakes
2010 Pinnacle Air Flight 3701
2004
Binghamton Shootings
2009 Corporate AirFlight 5966
2004
H1N1 Response 2009 Islamabad Bombing
2004
Butte, Mont. Crash 2009 Jakarta Bombing 2003
Major Global Disasters:Major Global Disasters:Crisis Year Crisis YearAirline 236 Accident
2001 Fortune 500 Co. Shootings
1999
Terrorist Attacks-NYC, DC
2001 American Airlines 1420 Accident
1999
Major Tech Office Shootings
2000 Amtrak Train Derailment
1999
Singapore Airlines 006
2000 Littleton, CO Shootings
1999
Alaska Airlines 261 Accident
2000 Oklahoma City Bombing
1995
Executive Air Accident
2000 East Coast Hurricanes
1993
Saudi Arabian Airlines Hijacking
2000 World Trade Center First Bombing
1993
Egypt Air 990 2000 So Cal Earthquake 1993
The Impact of Disasters The Impact of Disasters on the on the
Transportation SectorTransportation Sector
Traditional•Logistics•Operator Accreditation•Asset Management•Route Planning•Employee Training•Fuel Costs•Operator Shortfalls•Increased Freight Rates•International Competition•Human Resources/Compliance•Supply Chain Dependence
•Additionally – The Impact of Disasters
Transportation Sector – Some Issues FacedTransportation Sector – Some Issues Faced
•Airports Closed • September 11, 2001
•Roads Closed – it happens every day• Kansas City example
•Ports Closed• Port Authority
•Railways Closed• Passengers and Freight
•Bridges• Minnesota Bridge, Midwestern Floods
•Supply Chain failures• Breakdown of one entity
•Many more – fuel shortages, strikes, weather, etc.
Actual Impacts of Disasters: TransportationActual Impacts of Disasters: Transportation
Traditional•Logistics……………………………….Late runs, Service Level concerns•Operator Accreditation……………….Replacement credentials•Asset Management…………………..Accounting, accountability •Route Planning……………………….Change and misinformation •Employee Training…………………...Postponed due to priorities •Fuel Costs………………………........Using alternate suppliers•Driver Shortfalls……………………...Alternate routes on local roads•Increased Freight Rates…………….Just In Time delivery issues•International Competition……………Others can step into your account•Human Resources/Compliance….…Great scrutiny at time of disaster•Supply Chain dependence……........Perhaps, the most difficult to control
< ATOD – At Time of Disaster >
Disaster Consequences in TransportationDisaster Consequences in Transportation
•Travel & Transportation CEOs are clear about their plans to leverage partners as a source of innovation
• In 2012 – 67% of Travel & Transportation CEOs interviewed planned to partner extensively
• In 2008 – 47% of that same group interviewed made that same claim in the 2008 CEO study.
Source: IBM Global CEO Study with face-to-face interviews with more than 1,700 CEOs in 64 countries and 18 industries
Dated: May, 2012
Global Studies reflect Supply Chain Global Studies reflect Supply Chain growthgrowth
•Perhaps, you are protected – what about your Supply Chain partners?
•Have they protected themselves from disasters as well as you have?
•It takes just ONE Supply Chain partner to put you out of business.
So, what can you do about it?
As Wal-Mart, Target, Boeing, Capital One and other major companies do:
Require your partners to have a Testable Recovery Plan!
Choose “prepared” Supply Chain partners Choose “prepared” Supply Chain partners
Preparing for Preparing for Disaster EventsDisaster Events
Some very important questions to ask yourselfSome very important questions to ask yourself::• Who is in charge (and accessible) at time of disaster? • What is the real cost of a disruption to your business?• Where do you recover your business if you relocate?• When do you make the decision to mobilize resources?
and…• How can I be accountable to both my family and business at the same
time – if there is a choice to be made? • How long does it take us to recover from a disruption?• How do we reach our employees out on the road?
Due to today’s liability laws, and just plain common sense, all businesses need answers to all of these questions
Disaster Planning Tools are available to Disaster Planning Tools are available to all businesses – but, what do you really all businesses – but, what do you really
need?need?• Gap Analysis• Risk Assessment• Business Impact Analysis• Emergency Preparedness • Crisis Management Plans• Disaster Recovery Plans• Business Continuity Plans• Evaluation of Current Plans • Notification/Messaging• COOP/COGS interfacing• Disaster Planning software
for companies in all sectors
• Workplace Violence • Transportation Solutions• Healthcare Solutions• Content Management• Workplace Recovery • Employee Preparation• Shelter At Home• Shelter In Place• Human Resources • Nuclear Threat Response• Pandemic Planning• Exercise & Testing
•What are you doing right now?• Are you backing up your data off-site every day?• Have you developed the procedures to recover your business?• Have you designated certain people in succession roles?• Do you maintain alternate facilities to run the business?• Have you ever truly tested your recovery processes?
• What plans do you have?• Disaster recovery of data and network systems?• Business Continuity of business processes?• Crisis Management Plans?• Emergency Management Plans?• Coordination with police, fire, medical facilities nearby?
•A
Where do you begin?Where do you begin?
YOU ARE PROBABLY DOING THIS NOWYOU ARE PROBABLY DOING THIS NOW
Record Retention & Back-up Procedures
But, Have You Planned for Your Business But, Have You Planned for Your Business Beyond Data Protection and Backup?Beyond Data Protection and Backup?
• Developed procedures to recover your critical business functions• Accounts Receivable?• Logistics?• Communication?
• Verify that recovery procedures work as planned?
• Trained employees on response beyond emergencies?
• Planned for the impact of Supply Chain failures?
• Do you have a place from which you can run your business that is absolutely ready to go, and no one can get in front of you to take it?
Next StepsNext Steps
•Take stock of what you are doing right now
•Make sure that these plans are current (well beyond Y2K)
•Understand your Supply Chain partners a little better
•Test your plans to see where how proficient your team is
•Act to address any weaknesses or gaps
•Major companies (including a few in this very room)do what they need to do to be successful
What else can you do to What else can you do to prepare?prepare?
Business Impact AnalysisBusiness Impact Analysis
A process designed to prioritize business functions by assessing the potential quantitative and qualitative impacts that might result if an organization were to
experience a business interruption event.
Financial, Customer, Operational, Legal, Regulatory, etc.
GAP AnalysisGAP Analysis
A process designed to expose the gaps which may exist in your recovery program that could prevent your management organization from
continuing to run your business successfully – to potentially save lives –
during the likelihood of a disaster event
Recovery PlanRecovery PlanA checklist and specific process of the steps required to recover your business, including:
• Strategies• Trigger Points• Recovery Procedures• Recovery Teams• Communication• Awareness of the plan to all employees!
Can you really separate business & Can you really separate business & family?family?Potential business consequences:
Loss of Customers. Loss of Revenue. Loss of Image, Reputation, Competitive Position. Unavailability of management to be accessible when needed most
Potential personal consequences: Your family is affected. Your community is affected. Unable to contact your loved ones. Unable to get status information.
With effective business planning, family impact is less!!
Impact of Disasters on the Impact of Disasters on the Transportation SectorTransportation Sector
Ralph Petti, MBCI, CBCPRalph Petti, MBCI, CBCPPresident, Continuity First, Inc.President, Continuity First, Inc.
Member, North Carolina Chamber of CommerceMember, North Carolina Chamber of Commerce
www.ContinuityFirst.com Toll Free: 888.977.7475Toll Free: 888.977.7475Direct line: 908.310.6381Direct line: 908.310.6381
Annual Conference – Myrtle Beach, SCAnnual Conference – Myrtle Beach, SCJune 22, 2012June 22, 2012
