Communities across the Gulf Coast, Florida and Puerto Rico continue to feel the effects of Harvey, Irma and Maria, and determining the best disaster response strategy is an enormous challenge. At the same time, it’s difficult to avoid comparisons to Hurricane Katrina 12 years ago. These two conversations should overlap, as Katrina provides a number of lessons for recovery from future storms.
In particular, hurricane-damaged areas should encourage the private sector to play a large role in both disaster response and long-term recovery. Firms like Walmart and Home Depot were crucial to both processes during Katrina and were again at the forefront this hurricane season.
Walmart is the most instructive example. Walmart had 45 trucks worth of supplies ready to roll into New Orleans the moment the storm passed, and was able to get supplies to residents more quickly and effectively than FEMA.
In the three weeks after landfall, Walmart moved about 2,500 truckloads of merchandise to stores along the Gulf Coast. Drivers and trucks were prepared to ship relief supplies directly to community members and organizations providing help. The company provided a great deal of free merchandise, including prescription drugs, to evacuees in both New Orleans and Houston. Home Depot, meanwhile, provided more than 800 truckloads of supplies and bused in over 1,000 employees to distribute them.
Other firms provided similar help. Marriott offered evacuees free temporary lodging at hotels across the Southeast. McDonald’s prepared basic menu items for first responders at no charge. Proctor & Gamble’s Loads of Hope program provided free mobile laundry facilities during the long recovery.
Perhaps most important, all of these firms got their own stores open as quickly as possible, which residents pointed to as an important sign of a return to normalcy. Walmart, for example, had 126 stores and two distribution centers closed at one point during Katrina. Of those, 89 reported some sort of damage. Within 10 days of Katrina’s landfall, all but 15 of those stores had reopened.
The agility of these firms in providing effective disaster response shouldn’t surprise us. They face the challenge of moving goods and people to where they’re needed every single day. Walmart’s advances in inventory management are legendary and are what drove its enormous growth in the 1990s.
The response to the three recent hurricanes have illustrated this as well. In Texas, H-E-B grocery stores brought their mobile kitchens, water tankers and a mobile pharmacy into hard-hit areas. Walmart moved 1,360 semi-truck loads of bottled water into Florida ahead of Irma’s landfall. These companies are able to leverage the local knowledge and experience of people who live in the area and know what they need to provide.
Hurricane Maria has also provided opportunities to see the private sector in action. Walmart and other firms have made donations of cash and goods to Puerto Rico. Frontier Airlines and Oskar Blues brewery teamed up to ship over 91,000 cans of water to affected areas. The devastation in Puerto Rico has made it harder for both public and private relief, but even under those conditions, the private sector is stepping up.
By contrast, government agencies — even ones dedicated to disaster response like FEMA — do this work only when storms hit. In addition, because FEMA doesn’t have to turn a profit, the incentives it faces to learn lessons from its mistakes are far weaker than those facing private sector firms. Distant FEMA bureaucrats also lack the needed local knowledge.
So as the waters recede, all of the hurricane-damaged areas should heed the lessons of Katrina. On the long road from response to recovery, firms like H-E-B and Walmart—already a large part of many residents’ lives—will have a major role to play in returning to normalcy.
And when the next storm hits, it will be especially important to let the folks who know how to move goods do their job and get supplies to where they need to be in the immediate aftermath. Avoiding a humanitarian disaster might depend on it.
Steven Horwitz, an affiliated senior scholar with the Mercatus Center at George Mason University and an economist at Ball State University, has done nationally recognized work on the Hurricane Katrina recovery.