Southern California Wildfires and Windstorm

Client Alert

Supply Chain Risk Alert

Severe wildfires and windstorms have impacted Southern California since January 7, 2025. The Santa Ana winds, combined with dry conditions, triggered widespread fires in Los Angeles County, the Inland Empire, Orange County, and Ventura County. Affected areas include the Pacific Palisades, Malibu, Altadena, Pasadena, and Sylmar. The situation remains dynamic, with new fires emerging and containment efforts ongoing.

California’s role as a vital nexus for transportation, technology, and industrial machinery places manufacturing supply chains at significant risk from the ongoing wildfires. Power outages, evacuations, and closures of key transportation routes have disrupted production and distribution networks in the Southern California region and beyond. Businesses should anticipate delays, shortages, and increased operational costs.

Exiger empowers clients to assess the impact of wildfires on their supply chain through cutting-edge visualization tools that map the geolocations of their suppliers. By pinpointing suppliers in affected regions and analyzing their capabilities and products, clients can proactively identify alternative sources, ensuring continuity and minimizing operational disruptions.

Background

The wildfire event is driven by strong Santa Ana winds, which began on January 7, 2025, and are expected to persist through January 15. Major fires include the Palisades Fire in Malibu and Pacific Palisades; the Eaton Fire, impacting Altadena and Pasadena; and the Hurst Fire in Sylmar.

According to The LA Times, 24 fatalities have been reported and more than 12,000 homes, businesses, and other buildings have been damaged or destroyed. At least 153,000 people have been forced to evacuate from affected areas. On Monday, January 13, the National Weather Service issued its most severe red flag weather warning for parts of Los Angeles and Ventura counties forecasting the potential for “explosive fire growth” as winds intensify late Monday night through Wednesday, January 15.

Historical events, such as the 2017-2018 Thomas Fire in Southern California, have demonstrated that wildfires of this magnitude can severely disrupt supply chains, with road closures, damaged infrastructure, and workforce displacement leading to delays and increased costs. Power outages and poor air quality further exacerbate challenges for logistics and operations.

Anticipated Disruptions

The Southern California wildfires pose significant risks to the supply chain, including:

Strained Logistics Networks: Emergency response efforts may prioritize resources, limiting capacity for commercial shipping.

Transportation Delays: Major road closures, including highways and local access routes, may impede the movement of goods.

Cost Impacts: Increased transportation costs, rerouting expenses, and supply chain bottlenecks may drive up operational expenses.
Supply Shortages: Interruptions to manufacturing and distribution centers could result in reduced inventory availability.
Labor Challenges: Evacuations and hazardous conditions could reduce workforce availability.

According to the US Army Corps of Engineers, the Port of Long Beach and the Port of Los Angeles were the 5^th and 11^th largest ports in the US by total trade weight in 2022, the most recent data available. Federal Aviation Administration records from 2022 indicate that LAX is the 4^th largest airport in the US by weight of cargo landed. While the Ports of Long Beach and Los Angeles are outside the Red Flag Warning zone, transportation routes to and from these critical hubs pass through affected areas, potentially disrupting access to both the ports and the airport. Additionally, several other airports are within or just outside of the Red Flag warning zone.

Recommendations for Stakeholders

To minimize the impact to your organization, Exiger recommends the following:

Assess Financial Exposure: Evaluate potential impacts on revenue, operations, and supply chain performance.
Activate Contingency Plans: Identify alternate transportation routes and suppliers to ensure continuity.
Communicate Proactively: Inform customers and partners about potential delays and disruptions.
Review Insurance Coverage: Confirm coverage for fire-related damages and interruptions to business operations.
Monitor Developments: Stay updated on evacuation orders, fire containment efforts, and road closures. Monitoring resources include:
- Cal Fire, Watch Duty, and LA County:
  Wildfire maps, incidents, evacuation orders, and evacuation shelters
- National Weather Service:
  Weather forecasts and warnings
- Public Works Los Angeles County:
  Road closures in Los Angeles County
- US Power Outage and Los Angeles Department of Water and Power:
  Power outage maps