Jim Finley's home is on the outskirts of New Orleans, and his house fared better than most, he says. His plumbing company, on the other hand, he's not so sure about.
C.N. Finley Inc. has 12 employees, who were scattered when Katrina hit - and some had Finley service trucks with them. Though he knows they're all safe, when they'll begin working again, that's another story.
Flying over the city at 7,000 feet while piloting his private plane, Finley could see the devastation and described it as a “ghost town.” Water touched everywhere and everyone. Finley wonders when life - especially business life - will get back to normal.
“There is no working post office, no working bank, which means no checks being delivered, no funds being transferred,” he tells us. Finley is working on getting his technicians their last paycheck, and making them eligible for unemployment insurance, even if that means firing them for a while.
With dislocation so widespread, rebuilding seemed months down the road. The daily business transactions we take for granted - stocking at supply houses, depositing money, paying bills - are all wiped out. It's a “stone age” time, Finley admits. The money is just not moving.
Before the levee broke Aug. 30, and after Katrina had moved on, one long-time technician contacted Finley saying he didn't think he'd make it in to work the following day because his house had taken on water. Finley finds that amusing now, looking back on the aftermath of it all. One thing's for sure, the work at hand and the work to be done is massive, and Finley hopes his company will be a part of it.
Supply Houses Affected, TooParks, Peyton & Sasser's supply warehouse is in north Louisiana (Hammond), so it was untouched by Katrina physically. But its working offices are along the now infamous I-10 corridor toward southern Louisiana, and phone lines weren't working as we went to press.
“We need every last order we can get to survive, and we can't get any kind of phone calls or faxes,” says Frank Parks, one of the principals of the manufacturers rep firm. “Missed phone calls are killing us.”
Parks describes the whole situation as frustrating. Any of the shipments already en route to Parks, Peyton & Sasser customers in the Gulf Coast are lost in limbo. For anybody in the rep business, says Parks, regardless of your industry, if your territory was Louisiana and Mississippi, you just lost 40 percent of your territory.
“People say, 'Oh, what a building boom you'll have.' Yeah, if we can only stay in business until that happens,” Parks offers.
Currently, no commission dollars are being earned from the New Orleans to Pascagoula corridor, says Parks. How could there be, he muses. Even if the supply houses were open, who are they selling to? What will come first: businesses so people can get paychecks, or houses so people can live and go to work?
The industry at large, and the entire country, are watching and waiting to see the outcome.
Katrina In ActionAccording to the National Weather Service's National Hurricane Center, Katrina will likely be recorded as the worst natural disaster in the history of the United States. The storm produced catastrophic damage and loss along the Mississippi and Gulf Coast. The extent of the devastation has yet to be measured.
On Aug.23, Katrina formed from a tropical wave and became a depression roughly 175 miles southeast of the Bahamas. The next day it was classified as a tropical storm moving northwest, ultimately turning west to South Florida.
Gaining strength, Katrina became a Category 1 hurricane the evening of Aug. 25, hitting Miami-Dade/Broward County. It dumped more than a foot of rain and toppled trees and power lines. The Florida Keys also were affected.
When it entered the Gulf of Mexico, Katrina grew to Category 5 strength by Aug. 28, 250 miles south-southeast of the mouth of the Mississippi River. Peak winds were recorded at 175 mph. Pressure fell to 902 MB, the fourth lowest recorded in history.
Turning to the northwest, then north, Katrina slammed into Plaquemines Parish, La., as a Category 4 with 140-mph winds. Continuing northward, Katrina, now a Category 3, made a second landfall Aug. 29 near the Mississippi/Louisiana border with 125-mph winds.
Technically still a hurricane but weakening, Katrina carried on inland 100 miles near Laurel, Miss. It downgraded to a tropical depression in Clarksville, Tenn., Aug. 30. Remnants of Katrina raced east-northeastward to New York at month's end.
The Industry RespondsMore than seven plumbing industry associations and organizations convened in a teleconference Sept. 2 to discuss the impact Katrina will have on the industry, and to join in concert toward relief.
Key individuals participating in the conference included: Ike Casey and Mary Garvelink (PHCC-NA); Russ Chaney and Allen Inlow (IAPMO); Inge Calderon (ASA); Hans Tiedemann (MCA of Alberta); John Gentille (MCAA); Barb Higgens (PMI); and Shannon Corcoran (ASSE).
While most of the organizations pledged money to various relief efforts in the days following Katrina, the group discussed the possibility of a plumbing coalition to provide resources and revenue toward the rebuilding effort.
Gentille spoke about the requests he fielded from MCAA members wanting to help in a specific or individualized way, so progress can be seen. He mentioned that many members from the affected areas took company trucks home with them, which were subsequently lost in the storm, compounding an already devastating disaster from a business standpoint.
The group also convened as a way to prepare for any future disasters, so response from the industry can be unified.
The yet-to-be-named coalition will determine if there is existing infrastructure - possibly through FEMA - to act as a clearing house for rebuilding efforts, which could include materials, manpower and money.
Projects like Rebuilding Together, a national charity supported by the PHCC, offer individualized help to those in need. Other avenues and relief organizations will be contacted as well (including the World Health Organization, the Red Cross, The Army Corps of Engineers, and the Salvation Army) to determine the best course of action for the coalition.
The WHO reported to Chaney two paths to consider before relief can begin: 1) assessment of the situation at hand with specific attention to sanitation; and 2) preparedness to ramp up support and supplies to affected areas so rebuilding can begin as soon as possible.
As of this writing, assignments were handed out and fact-finding was to continue, leading to a second conference call in late September.
Opening Their Hearts And Their WalletsPlumbing & Mechanical's parent company, BNP Media, joined many other industry firms in donating funds and/or services to Hurricane Katrina relief efforts with its $25,000 pledge to the American Red Cross's International Response Fund. Organizations and manufacturers pledging support include:
Almost immediately, that agreement was deployed for high-skill HVAC and refrigeration repair work on Wal-Mart stores throughout the region. The agreement is available to all UA-signatory mechanical contractors responding to the rebuilding emergency.
We're sure there were many other PHC industry groups and individuals who responded magnanimously to this unprecedented disaster. These were merely those that came to our attention in the immediate aftermath.
Small Businesses Fear Hurricanes MostIn an industry consisting primarily of small businesses, a natural disaster such as Hurricane Katrina can be devastating, even after the flood waters are pumped out and rebuilding begins.
The National Federation of Independent Business, the nation's largest small-business advocacy group, conducted a poll in late 2004 to determine what type of impact disasters, both natural and man-made, had on small-business owners (7.3 percent were in construction, 5.9 percent were in the wholesale trade).
However, the random-sample survey on which the study is based was interrupted by the series of hurricanes that struck Florida late last summer, causing an under-representation of difficulties, especially severe difficulties, reported. The fact that many small firms hit by natural disasters do not recover also affected the results, as these firms were not included in the sample.
Nevertheless, poll results show that, in the last three years, the loss of sales and customers was cited by nearly two-thirds (62 percent) of the respondents as the biggest problem brought on by natural disasters. While winter storms affect larger numbers of businesses overall, the study reports, hurricanes, tornadoes and typhoons are significantly more destructive in the damage caused.
Given that the loss of sales and customers is so important, the amount of time a business remains incapacitated is vital, the report states. Nearly one-third (30 percent) of operating small businesses in the United States have been forced to shut down for 24 hours or longer due to a natural disaster.
Extreme impacts, defined as those forcing a business to shut down for at least one week or causing $100,000 or more in damages, were highly concentrated in the study - only 2-3 percent reported experiencing such an event in the last three years. (Remember: This poll occurred right before the series of hurricanes in Florida last year, and the impact of Hurricane Katrina on small businesses in the Gulf is still unknown.)
Fully operational is different than partially operational, and poll results indicate that it takes 11 1/2 days to become fully operational after a disaster. However, only about 10 percent of respondents say it took them a week or more to become fully operational, while 74 percent were at full speed in 72 hours or less. But these numbers only reflect the experiences of those who survived the disaster; they do not reflect those that were destroyed or mortally wounded.
Eighteen percent ranked expenses/damages not covered by their insurance policy as a major difficulty, although many believed their insurance coverage was adequate. The lack of insurance coverage was more often related to continuing operations than to property damage.
Two in five (38 percent) small-business owners have an emergency-preparedness plan on hand, almost all of whom confirmed communicating it to their employees.
River Of LifeIn terms of the U.S. economy, getting the Mississippi River operational - a lifeline of the United States - is essential to the country's vitality and economy, says The Ports of Indiana. It is a gateway for international trade, and a crucial part of the freight system of the Midwest. The New Orleans-Gulf Coast is home to six of the top 15 tonnage ports and handles more than 500 million tons of cargo a year - more than all the waterborne shipments of California, Florida, New York and Alaska combined.
Mississippi River barge traffic took a major hit from Katrina. The port of New Orleans opens to a river system serving 33 states and connecting to six railroads. Initial reports estimated river traffic to be shut down for months in the vicinity of New Orleans, although evidence of American resiliency could be seen in the opening of limited barge shipping as of this writing on Sept. 13. That was also the day of the first commercial flight into Louis Armstrong New Orleans International Airport since Katrina struck on Aug. 29.
Port companies, such as steel traders, had to divert shipments through the Lake Michigan port for inland distribution. Two Ohio River ports also considered using railways, alternative routes and expanded storage capacities. However, to replace one tugboat hauling 15 barges by land means that two-and-one-quarter 100-car unit trains on two-and-three-quarter miles of track or 870 trucks stretching over 34 miles of highway would be needed.
Increasing fuel costs makes waterborne transportation an important cost-saving mode for shippers.
Katrina Impacts ConstructionWhile the full extent of Katrina's wrath has yet to be determined, the number of homes and businesses lost to the hurricane surpasses any previous storm in U.S. history. (Destroyed houses by Hurricane Andrew in 1992 was estimated at more than 28,000. Last year's storms, Ivan, Frances and Charley, destroyed nearly 27,000, according to the Red Cross.)
Now & In The Future
Most damage was caused by high winds and the storm surge. But the flooding that occurred in New Orleans, Mobile and elsewhere has made many more homes uninhabitable.
“The repair process will absorb much of the construction labor near the affected area and several key materials that would otherwise have been used to build new homes,” reads a National Association of Home Builders economic report. And while prices may drop at first because many projects will initially have been cancelled, the rebuilding effort will increase demands, especially in lumber, cement, steel and plywood.
“Although the loss of tens of thousands of homes implies increased demand for, and construction of, new homes,” the report concludes, “past experience has shown that there is no massive surge in home building in affected areas. Replacing units destroyed by the storm will not begin for many months and will take place slowly, over a number of years.”
The Associated General Contractors reported that July 2005 construction activity showed widespread improvement (9.3 percent higher than January-July 2004), but Katrina's economical impact for the rest of the year and into 2006 will vary, according to Ken Simonson, chief economist of AGC.
The growth figures, for instance, do not reflect “real” growth, he says, since they don't adjust for a large run-up in the cost of materials: cement, steel, copper, gypsum and petroleum-based inputs. Katrina, says Simonson, will push these costs much higher.
Diesel fuel for equipment, trucks and deliveries plays a large part, as well as petroleum and natural gas for asphalt, plastic pipe and insulation manufacturing.
“The disruption to ocean, barge and rail transport from Katrina will cut further into cement supplies,” the economist says. Also, urgent needs for rebuilding infrastructure - roads, bridges and buildings - will increase demand and diminish supply.
At press time, AGC has urged the Commerce Department and the Southern Tier Cement Committee to allow Mexican cement into the Gulf states without the 55 percent duty now in place. AGC also has been working closely with the Army Corps of Engineers to provide equipment and expertise.
Pumping Out New OrleansEdward Allis, an engineer with Peerless Pump Co. of Indianapolis, with 34-years experience in the pump industry, commented on some of the challenges of pumping flood waters out of New Orleans and surrounding areas hit by Hurricane Katrina. He is among the company's team of experts who have offered their help with pump technology.
As of press time, he hasn't been sent to help directly, but his company has volunteered to provide a number of high-powered pumps to the U.S. Army Corps of Engineers, the City of New Orleans and Jefferson Parrish. The company's main concern is to help the people in New Orleans get the water out of the city.
Allis guesses there are 148 pump stations around the city. “Some of them were undoubtedly damaged - the motors, pumps and/or controls. The pumps in New Orleans are, for the most part, electric motor-driven pumps. So when the levee failed and everything flooded, because of the loss of electricity, nothing worked. These pumps were never intended to be able to pump out water from a broken levee.”
The pumps needed in New Orleans are high capacity, low pressure pumps designed to get the water from the canals, pumping it across the levee, and out of the city (to Lake Ponchatrain or the Mississippi River).
The control panels - basically the brains of the pumps - will have to be dried out, inspected and possibly repaired. If the motor has been submerged, that will definitely need to be inspected, maybe even replaced. Service engineers and quick-response centers from Peerless are being made available to do these inspections if asked, he adds.
The pumps being offered to the Army Corps of Engineers are considered to be temporary. It's helping, but there's still a lot of water to be pumped.
“The Army Corps of Engineers has a huge task on their hands. The important questions to ask right now are what's the most effective way to de-water New Orleans, and how do you sanitize it.”
Peerless is able to provide low-volume, high-pressure pumps that might be helpful to the washing down of things regarding sanitation, but it might not be necessary without knowing how much bacteria there is/will be, he notes. Peerless Pump is concerned with helping, not just New Orleans, but all the Gulf Coast.