Mike Lott, owner of Dibs Chemical & Supply Co., Gulfport, Miss., is no stranger to hurricanes. In 1969, he lost everything to Hurricane Camille, long-considered to be the worst storm ever to hit the U.S. mainland. Lott never imagined that he would experience a storm as severe as Camille again in his lifetime. But 36 years later, he did. And this one was much worse.

“Hurricane Katrina put Camille to shame,” he says, summing up in one simple statement the magnitude of the new millennium’s most powerful natural disaster to strike the United States.

Two days after Hurricane Katrina hit the Gulf Coast, Lott and his son returned to the site of their 35,000-square-foot warehouse.

The roof was gone, the south wall had collapsed, and more than 12 feet of water had flooded the building. A forklift parked in the warehouse had been tossed around like a toy boat. Five delivery trucks had floated away, and $280,000 worth of inventory was strewn approximately three quarters of a mile down the coast.

It was a devastating scene, but Lott didn’t have time to dwell on his loss. He immediately sprang into action. After finding a smaller warehouse, he started placing calls to vendors and reopened three-and-a-half weeks later. The company lost 50 percent of its customer base following the storm, Lott says, but by February, the company had gained back about 20 percent of those they lost. “As businesses are coming back, our business is growing naturally,” he says. “We will rebuild. We did it before, and we’ll do it again.”

Like Lott, many jan/san distributors hard hit by Hurricane Katrina are determined to stay and rebuild their businesses. “We’re not going to quit,: says Mike Guillot, an associate at Guillot’s Sanitary Supplies Inc., New Orleans, La.

The company’s warehouse and everything in it was completely destroyed; Guillot’s continues to operate out of a temporary location while the warehouse is being rebuilt. “New Orleans people are very resilient,” he says. “We’ve faced a lot of obstacles, and we’ve bounced back.”

Back to Business
In the days and weeks following the storm, jan/san distributors’ number-one priority was getting in touch with their employees — a task made all the more difficult by the disruption in telecommunication services. Cell phones typically became the companies’ lifelines.

Bill Gates, president of Newell Paper Co., Hattiesburg, Miss., was fortunate: not only was his building spared, but his employees were all safe and accounted for after Hurricane Katrina. “I didn’t lose a single one,” he says.

Gates sent trucks north for gas and diesel fuel, as well as ice and water, which he shared with his employees. The day after the storm, his business was up and running, delivering much-needed supplies to hospitals along the Gulf Coast.

Within one week of the storm, AmSan Corp., Deerfield, Ill., was able to contact all 44 of its employees in Manny’s Sanitary Supply, an AmSan division located in New Orleans.

“Within two weeks, every one of our employees had living accommodations, or we had put them up in apartments, and they were re-engaged in our business,” says Richard Lantier, vice president and general manager.

Concern for employees’ well being was prevalent among business owners.

Guillot opened his home to five employees until they could find apartments. Unfortunately, the company is finding it difficult to continue paying all of its employees, so Guillot has helped some of them to find jobs with customers. He knows how important it is for anyone to get back to work and keep his or her mind occupied — especially after a disaster as traumatic as Katrina. “There are suicides and people dying of broken hearts every day,” he says, “and that will never show up in statistics.”

Responding to Customer Needs
Once employees were accounted for, distributors began reaching out to customers and the community.

Janitorial and paper supplies were in high demand in the days and weeks following Katrina, and distributors across the country gave generously. According to Tracy Weber, operations manager for the ISSA Foundation, members donated emergency cleaning products and supplies totaling nearly $200,000.

The ISSA Foundation also collected more than $35,000 from its membership, which was mailed to AmeriCares, a non-profit disaster relief and humanitarian organization that the ISSA Foundation partnered with to assist hurricane victims.

Companies around the country — and the world — felt a moral obligation to contribute to the clean-up effort that followed Hurricane Katrina. However, many distributors in the Gulf Coast region found their livelihood at stake.

“Often, after a disaster, people need [jan/san] types of products to clean up,” says Laura Craven, director of marketing for Dade Paper, Loxley, Ala. Fortunately the company’s branch in Mobile, Ala., did not suffer much physical damage. Dade Paper teamed with local government agencies and delivered cleaning supplies and paper products, as well as clothing and household items, to residents in some of the harder hit neighborhoods. The company also supplied much-needed bottled water.

Many customers faced janitorial problems that they had never encountered before, says Craven — like the spread of mold and the accumulation of fetid water. Gates has seen a 20 percent increase in sales since September 2005 as a result of the need for mold-fighting products in addition to can liners and other cleaning chemicals.

AmSan Manny’s Sanitary keeps more than $100,000 in commercial cleaning equipment on its floor in New Orleans at any given time, which has enabled the company to help customers clean their floors and remove large amounts of water and soil from their facilities.

Lott advertised on three local radio stations, giving his and his son’s cell phone numbers out for customers and the general public to contact. Calls started pouring in.

While distributors assisted their customers as soon as they could, suppliers were also quick to assist distributors that had lost their entire inventory. “The manufacturers have been wonderful,” says Guillot. “They started shipping merchandise in immediately, and we were up and running in a couple of weeks.”

Lott lost product that he hadn’t even been billed for yet, but his suppliers worked with him until he received his insurance payments. “There weren’t any manufacturers out there that did not jump up and do everything they could to help us,” he says.

Once supplies were secured, distributors faced the challenge of getting their products to customers. Some rented trucks; others used their own vehicles. At Manny’s Sanitary Supply, everyone pitched in: “We had managers driving trucks,” says Lantier. “We had one of our IT employees flown in to provide connectivity for our temporary facility in Hammond, La., and it wasn’t uncommon for him to hop into a truck and make deliveries. We’ve since moved back into our Tchoupitoulas Street location in New Orleans.”

Lost Labor
While distributors are doing what they can to get “back to business,” they are challenged by several remaining factors — one of the biggest being the shortage of employees in the region.

According to the U.S. Department of Labor, Bureau of Labor Statistics, there were just over 22,000 business establishments in areas of Louisiana and Mississippi that the Federal Eemergency Management Agency (FEMA) designated as flooded or damaged areas, or both. Information gathered in January 2006 showed that about 1.2 million people age 16 and older had evacuated from their homes in August due to Hurricane Katrina. About 600,000 of the evacuees eventually returned.

Seven months later, a lack of housing is still preventing many residents from returning, distributors say. Matthew Sherwood, senior editor of Global Forecasting, Economist Intelligence Unit, London, says, “It is difficult to find labor in New Orleans. It’s a ‘Catch 22.’ People are waiting until it’s safe to move back, but you can’t get things up and running until people return.”

As a result, many of the industries that distributors service are forced to get by with fewer employees. According to Lantier, the blue-collar labor force — waiters, hotel housekeepers, truck drivers, warehouse workers — has been hit the hardest. Distributors must now focus their efforts on helping customers operate more efficiently with fewer people — and training new employees is critical.

The labor shortage is also affecting distributors’ businesses in other ways. “A lot of things we deal with today typically aren’t issues elsewhere,” says Lantier. “For instance, if a truck breaks down, it could take three to five weeks to get it fixed because there aren’t enough mechanics available.”

The Path to Recovery
Despite all of the challenges presented by Hurricane Katrina, distributors are optimistic about their future in the region. However, even seven months after the storm slammed into the coast, they were quick to point out that it isn’t ‘business as usual,’ by any means. Recovery efforts will take several years, they say, and some businesses may never fully recover.

Distributors interviewed for this article lost between 20 percent and 50 percent of their customer base. The casino industry suffered the greatest economic setback. Other customers — including hotels, hospitals and restaurants — were severely affected, but are slowly beginning to recover. Distributors are also seeing the establishment of new businesses, such as grocery stores and theaters.

“A lot of our customers recovered, and business is growing,” says Craven. “People in these communities are hardy folk and bounced back. They weren’t going to let a storm keep them from living and working there.”

Gates has seen an increase in sales every month since Hurricane Katrina. “I think the future of jan/san businesses in this area will be tremendous,” he says. “We are seeing customers returning almost every day.”

Lantier is also pleased with the progress AmSan Manny’s Sanitary has made since the storm. “We’re continuing to experience significant improvement each month,” he says.

Loyalty to customers and the community fuels distributors’ determination to come back stronger and better than ever. Most importantly, businesses are working together in a spirit of cooperation to help each other with the recovery efforts. “Before the storm, business was competitive,” says Lott. “But it’s totally different now. We’re all back up and running, and we have all checked on each other.”

It is this teamwork that has impressed distributors the most — not just within the jan/san industry, but also among all businesses and residents that have decided to stay and rebuild. For many of them, this is the only home they’ve ever known, and that is reason enough to pick up the pieces and start over.

To ensure that a future hurricane or other natural disaster doesn’t have as big of an effect on the area, emergency planning has become an integral part of the Gulf Coast rebuilding.

Immediately following Hurricane Katrina, much of the nation’s focus was on hurricane preparedness — or rather, the lack of preparation. The federal government — as well as the local units of government — were blamed for not implementing emergency plans, or having insufficient plans.

Many distributors in the region say they already had emergency plans in place prior to Hurricane Katrina, but for some, this was a wake-up call.

“I imagine the storm has taught some hard lessons,” says Sherwood.

“Companies have to have contingency plans. You have to maintain good relationships and open communication with suppliers, have alternate sourcing available, and alternate transport if possible. When companies have to get product to market, they adapt quickly.”

Nobody knows this better than Lott: “One thing I’ve learned over the years is after something like this, if you can get up and going and start supplying the demands of the public, you’ll survive. If you wait too long, you’ll become a statistic.”

Kassandra Kania is a freelance writer based in Charlotte, N.C.




POSTED ON: 4/1/2006