Pre-positioning: Too Expensive Or In Reality A Reduction In Cost?

We just past the 3 year anniversary of the devastating earthquake in Haiti. One of the “lessons learned” from that event is that the pre-positioning of disaster supplies can be crucial to the effectiveness of relief work.

Few humanitarian aid organizations need to be persuaded that pre-positioning relief items in areas vulnerable to natural disaster can save lives. Not only does it save time in getting needed resources to disaster survivors, but pre-positiong resources can avert added costs that often occur when Suppliers bump up prices to meet emergency demand.

It isn’t always “price gouging”, but sometimes prices increase in response to the extra costs required to procure items literally from around the world and in an expedited manner. According to Simon Lucas of Reltex (a plastic sheeting company that makes tarpaulins), a $15 tarp can cost over $90 if it is being shipped from halfway around the world to meet the immediate demands of a disaster. “There’s nothing worse,” says Lucas, “than having to go to the Red Cross and say: ‘I’m sorry, I know there’s a huge tsunami, but we’re going to have to put the price up.’ It just looks like profiteering. But it’s not, it’s due to bad practice – not having enough pre-positioned stocks.”

So if pre-positioning supplies can actually reduce costs, why isn’t it a common practice among governmental agencies and humanitarian aid organizations? In the corporate world pre-positioning assests, supplies, and equipment is very common. In the governmental and humanitarian aid worlds this does not always occur because securing budget dollars and donations typically occurs “post-event”. Even though it would be a significant cost savings, it is difficult to convince voters, politicians, and donors to fund the purchase and storage of food, supplies, and equipment in advance of a disaster that may never come.

However, many organizations have begun pre-positioning regionally. The World Food Programme has warehouses of food stores in strategic locations, such as Dubai. World Vision International has a Global Prepositioning Response Network with a sophisticated combination of subject matter experts and both international and regional warehouses. And yet, with an extreme event like the one that occurred in Haiti, there will still be a deficiency in the amount of supplies needed to manage the event response.

Is there a solution to the problem? How do we get the positive momentum from regional pre-positioning to the local level?
The answer may lie in local warehousing. Buying and storing supplies locally brings economic benefits to communities, builds resilience, and results in emergency assistance that can be delivered at maximum speed and minimum cost. It would reduce the extreme costs associated with “last minute” orders that often occur after catastrophic events.

Emergency Visions knows all about emergency response logistics and how technologies can improve the storage, management, and movement of supplies into disaster affected areas. We encourage a coordinated approach to addressing this issue.

Certainly for the areas of the world where aid programs have existed for years (the Horn of Africa, Indonesia, Pakistan, Haiti, etc.), there are several aid organizations who have the capacity and infrastructure for local warehousing. Even smaller organizations could partner with their larger peers to store items in a local warehouse. Technology could easily insure that supplies ordered by one organization are properly accounted for even if stored in the same location as another agency. Perhaps we start there and link the successes of those programs to regional pre-positioning.

In any case, what is certain is that it will take financial commitments “prior” to disasters to fund the purchase and storage of these supplies. But, ultimately, that funding may just save money in the long term – and hopefully lives and property too.