The recent wildfires in Southern California have caused serious damage in several communities, including Altadena, Lake Hughes, Pacific Palisades, and parts of San Diego County. These fires have burnt over 54,000 acres, leading to multiple evacuations and loss of property. As of January 27, 2025, efforts to contain the blazes have made good progress, with the Eaton fire nearly fully contained at 99% and the Hughes fire at 98%, according to the California Department of Forestry and Fire Protection.
Immediate Effects on Supply Chains
While the damage is significant, the direct impact on supply chains has not been severe. Many warehouses and logistics centers, especially in areas like Riverside, Upland, Fontana, and San Bernardino, have not been affected by the fires. Lisa Anderson, president of LMA Consulting Group, pointed out that although these facilities were safe from the fires, some businesses did face short-term issues. For example, certain manufacturing plants had to shut down temporarily due to power outages, even if they weren’t in the line of fire.
DHL Supply Chain, which runs 13 facilities in the affected areas, reported no direct impact on their staff or operations. The company is ready to help adjust customer supply chains as needed to keep business running smoothly.
Challenges Ahead in Rebuilding
As the region shifts from emergency response to recovery, there will likely be significant challenges during the rebuilding process. The destruction of many homes and infrastructure means there will be a high demand for building materials and construction services. This surge in demand could put strain on supply chains, possibly leading to shortages and higher prices.
Experts from CBRE have pointed out that while immediate rebuilding efforts may take time because of necessary debris cleanup and infrastructure evaluations, there will be an expected short-term increase in storage needs for suppliers of building and manufactured homes. Robert Peddicord, a top manager at CBRE’s South Bay operations, noted that actual construction work might not start for two to three years, as preliminary tasks like waste removal and rebuilding infrastructure need to be done first.
Recommendations for Businesses
In light of these challenges, businesses should plan ahead for both short-term disruptions and the longer-term changes in supply chains. Using strong demand planning and staying flexible with sourcing and distribution can help companies deal with potential issues. Additionally, businesses should strengthen their relationships with suppliers and consider alternative sourcing options to manage the expected difficulties in accessing building materials and services.
The wildfires in Southern California highlight how important it is for businesses to be resilient and adaptable in managing their supply chains, especially in areas prone to natural disasters.
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