Market Overview

Quake Highlights Supply Chain Reality: Alaska Lives And Dies By Logistics

Quake Highlights Supply Chain Reality: Alaska Lives And Dies By Logistics

Police block traffic on the southbound Glenn Highway north of Anchorage, Alaska, due to damage from a magnitude 7.0 earthquake. 

The first thought that popped into Darren Prokop's head after the earthquake hit Anchorage last Friday was the status of the Port of Alaska. "Well, second really, after my wife and me," said Prokop, a logistics professor at the University of Alaska.

"My industry colleagues and I know that it's just a matter of time before the rusty wharf falls into the water."

The Anchorage facility, which handles 90 percent of the cargo, fuel and construction material coming into the state, is plagued by severe corrosion problems. Officials have embarked on a $1 billion modernization project, although so far only $56 million has been secured.

Fortunately, the magnitude 7.0 quake didn't disrupt port operations. Much of the Ted Stevens Anchorage International Airport stayed open, too. The 800-mile Trans-Alaska Pipeline shut down Friday morning as a precautionary measure but re-opened later that day. 

The state's road network took the biggest hit, especially parts of the northbound Glenn Highway around Eagle River, said Aves Thompson, executive director of the Alaska Trucking Association.

"It's slow going," he said. The Alaskan Railroad incurred some damage and that has left trucks to deliver freight, he said.



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If any state is equipped to deal with the post-quake logistics fallout, it's Alaska. Even in the best of times The Last Frontier is a challenging place to deliver food, fuel and other goods. It's a huge state, with a sparse population that is very disbursed. Plus, there are all sorts of challenges from Mother Nature: floods, tsunamis and extreme cold weather in the winter time.

The ports north of Anchorage can freeze over, Prokop said. Spring thaws can lead to flooding rivers.

Many of the remote villages in the interior are serviced by small planes, but they too are impacted by stormy weather.

All these challenges have forced Alaska to innovate, said Prokop, who has authored three widely read books on the global supply chain. "Alaska survives and thrives on its logistics," he said. "Whether it's winter or not, if you can do logistics in Alaska, you can do it anywhere in the U.S."

Propkop singled out Northern Air Cargo, a carrier based in Anchorage. The air freight service recently acquired systems that enable planes to land and take off on the gravel runways that are common in remote locations.

"Most jet planes can't because gravel is sucked into the jets and ruins the engines," Prokop said. 

No matter where you are in Alaska, you can order stuff from Amazon and get it on time. FedEx is the major Amazon carrier into the state. The company doesn't fly planes into remote villages, Prokop said, but partners with local planes to deliver the packages.

Other factors are helping sustain logistics post-quake. Seismic activity is a regular occurrence, and building and piping infrastructure are designed to withstand heavy shaking. Many Alaska residents learn to prepare — by maintaining 72 hour food/water supplies.

Still, Anchorage got off very lucky this time. "Things are remarkably surprisingly good," Aves said.

If the Port and/or the airport had been damaged, said Prokop, consumer supplies would have been severely impacted within a couple of weeks. Plus, about 90 percent of the state's revenue comes from state taxes on oil production. "So if the pipeline were down for multiple weeks or months, it would have impacted state revenue flows."

Prokop is bracing for aftershocks, seismic and otherwise.

"My colleagues and I will no-doubt be asked to ‘educate' the legislators in Juneau and the congressional delegation on the need to get moving with our port expansion project," he said.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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