One of the strongest hurricanes recorded in the Atlantic barreled down on the U.S. Virgin Islands and Puerto Rico on Wednesday, headed for South Florida, forcing residents to flee their homes and businesses to alter their plans.
At online marketplace BrandsofPuertoRico.com, employees on Tuesday fulfilled as many orders as possible before going home until at least Friday as Hurricane Irma hit Puerto Rico, co-founder Alan Taveras said in an email to Internet Retailer. “Life and family are first for our company and team,” he says. “As a team leader, I can’t focus on work while people’s lives are in danger.”
Brands of Puerto Rico helps local brands sell their products online and reach a global audience. Taveras and his team spent the weekend working with the company’s vendors and clients to try to plan for Irma’s impact. The e-commerce site is hosted on the cloud on Amazon Web Services and will remain live regardless of the hurricane, Taveras says. Brands of Puerto Rico’s customer service team would continue to work at office in Puerto Rico as long as they had power and functioning internet, he says.
“We will continue to fulfill all their orders on Friday if the courier services return to normal and answer any questions while technology allows us to,” he says.
The U.S. Postal Service on Tuesday evening suspended service in Puerto Rico, with no retail and delivery operations in the Caribbean District until further notice, according to a USPS service bulletin. That district includes the U.S. Virgin Islands (St. Thomas, St. Croix and St. John). “With Hurricane Irma expected to impact the Caribbean islands, Priority Mail Express and shipment of live animals to Puerto Rico and the Virgin Islands have been suspended until further notice,” the USPS said Wednesday morning.
FedEx Corp. says it is monitoring Hurricane Irma, with a focus on contingency plans to protect employees and facilities. In Puerto Rico, FedEx’s SmartPost service has been suspended. SmartPost service utilizes FedEx’s network for the initial leg of a parcel’s delivery and then hands off to the U.S. Postal Service for the final mile. UPS Inc. has a similar program, SurePost.
Irma is a Category 5 hurricane, which packs sustained winds of 157 mph or higher. Irma could result in up to $1.45 billion in lost retail sales (online and offline) in the United States if the storm is as damaging as forecast models predict, according to Planalytics Inc., a firm that tracks the weather’s impact on retail transactions and store traffic. Planalytics estimates that Hurricane Harvey, which hit the United States just a week and a half ago, resulted in $1 billion in lost retail sales.
“We think that Irma has the potential to be larger [than Harvey] based on the size of the storm, the potential impact of the storm in terms of population,” says Evan Gold, executive vice president of global services at Planalytics. “Right now the [forecasted path] cone goes from Miami up through Orlando.”
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Even with the severe hurricane forecast, Deerfield Beach, Fla.-based jewelry e-retailer Ziamond Inc., says Wednesday was business as usual.
“We’re a South Florida-based company, so we’re used to this,” says Scott Cummings, the web-only retailer’s chief operating officer and general manager. “Luckily we have a lot of our data offsite in the cloud. Our platform is SaaS-based, our CRM and shipping software are SaaS-based.”
The USPS on Wednesday suspended all post office operations in the Florida Keys and parts of South Florida, and that shutdown is expected to be in place through Monday. Priority Mail Express service and shipment of live animals to the area also are on hold.
According to the Weather Channel, the center of Hurricane Irma is projected to hit South Florida on Sunday morning. Cummings says Ziamond, No. 724 in the Internet Retailer 2017 Top 1000, is processing as many orders as possible before conditions deteriorate in South Florida.
“Inventory and manufacturing is something we’re taking a look at, getting the orders processed as quick as we can so the pipeline is cleared up before the storm gets here,” he says. Ziamond also is developing a contingency plan for next week and figuring out how to move orders from one site to another, if necessary.
Cummings says Ziamond’s corporate headquarters are in Deerfield Beach, while its manufacturing facility is located in Sunrise, Fla., about 19 miles southwest and slightly farther inland.
Ziamond’s products are manufactured at its facility in Sunrise and fulfilled from Deerfield Beach, but the retailer is looking at other options. “Typically we don’t ship from the manufacturing facility,” he says. “We’re trying to coordinate where we have the ability where we can process the orders from (the) manufacturing (facility).
Cummings says Ziamond has business interruption insurance, which means it will be covered if damages from Irma force the retailer offline for any length of time.
“Our main vulnerabilities are electricity and water coming in from the roof,” he says. “We do have a generator and we stay full on our generator throughout hurricane season. We’re pretty much functional in-house as long as we don’t have major roof damage, and if that does happen, all of our stuff here we protect from water.”
As the storm approaches, Ziamond will not post notices on its website or social media channels warning shoppers about potential delays in receiving products.
“We used to put up notices, and we felt like that heightened the anxiety of the customer,” Cummings says. “If customers call us, we’ll be transparent. If we feel there could possibly be a delay, we’ll let them know on a case-by-case basis. We’re not going to send out a broadcast email or put up a notice on the site unnecessarily.”
Cummings says he has spoken with his representatives from UPS and the USPS, and both informed him to expect service to be down for three to four business days in a worst-case scenario,but likely one to two days with this storm. Ziamond’s standing policy informs shoppers that orders will take about 10 business days to process.
With two major hurricanes hitting the United States in the span of less than two weeks, retailers may want to consider their insurance policies to determine how covered they are in the event of a major weather event.
Andy Wood, chief administrative officer at small business insurance provider Insureon, says that unlike Ziamond, many businesses opt to go with simple general liability coverage rather than carry business interruption insurance. Not having a business interruption policy means expenses needed to restart a business are not covered.
“I would strongly recommend for retailers to really have a good handle and be able to demonstrate in the event of a claim what their revenue was and what their cost of goods was,” Wood says. “Take out any utilities costs and any services you purchase from outsiders and any costs that would be discontinued in the event that you are out of business. That is your business income worksheet that you have to have in your mind. In the event that you are out of business as a result of this and you have to incur any extra expense to get started, keep track of those expenses.”Favorite