Wal-Mart to the Rescue
A hat tip to Colby Cosh of Canada’s National Post, for (once again) highlighting one of the few success stories in the response to Hurricane Katrina.
That’s right; the same big-box retailer that Democratic politicians love to hate was actually one of the most effective organizations to respond to the storm. While FEMA fumbled through its initial response, Wal-Mart was delivering thousands of truckloads of needed supplies, providing a life-line for battered communities and their residents. Some local leaders in Louisiana and Mississippi believe residents actually owe their lives to Wal-Mart, not the federal government.
Mr. Cosh’s conclusions are based on a new study, authored by economics professor Steven Horwitz of St. Lawrence University of New York, and recently published by George Mason University’s Mercatus Center. Analyzing the response to the storm, Dr. Horwitz found that Wal-Mart (and other large retailers) were far more flexible (and adept) in meeting the challenge of Katrina.
As Horwitz discovered, Wal-Mart and building supply chains like Home Depot and Lowe’s began mobilizing for the storm well in advance. Wal-Mart’s emergency operations center started preparing for Katrina prior to the storm’s landfall in Florida, days before it struck the northern Gulf Coast. Home Depot made similar preparations, pre-positioning supplies in areas threatened by the storm. Contrast that to the ineptitude of state and local officials in Louisiana, who were still debating a proposed evacuation order--two days before the hurricane arrived.
While political leaders fiddled, Wal-Mart had 45 truckloads of water, generators and other needed items waiting at its distribution center in Brookhaven, Mississippi, only two hours from the coast. As soon as the hurricane passed, the trucks were on the road. In many locations, Wal-Mart tractor-trailers were the first “relief convoys” encountered by storm survivors.
Horwitz also notes that Wal-Mart granted wide latitude to its local and regional managers in providing disaster aid. In one Louisiana town, an employee drove a forklift through the door of his Wal-Mart store, to obtain bottled water for a local nursing home. Another outlet became a temporary barracks for police officers whose homes had been flooded by the storm.
But perhaps the best example of Wal-Mart’s empowerment policy occurred in Waveland, Mississippi, a community that was heavily damaged by the hurricane. Unable to reach her superiors, assistant store manager Jessica Lewis decided to run a bulldozer through her store, collect essential supplies that weren’t water-damaged. The supplies were then stacked in the parking lot and given away to local residents. Ms. Lewis also broke into the store’s pharmacy locker to supply critical drugs to a local hospital.
While Wal-Mart’s efforts were largely ignored by the media, they weren’t lost on local residents or political leaders. In an interview with Tim Russert on “Meet the Press” just days after the storm, Jefferson Parrish President Aaron Broussard noted that Wal-Mart had delivered three truckloads of bottled water, only to be turned back by FEMA bureaucrats.
He also quoted the area’s colorful sheriff Harry Lee who observed, “[if] the American government had responded like Wal-Mart has responded, we wouldn’t be in this crisis. The mayor of Kenner, Louisiana credited the company’s deliveries of food and water in preventing the widespread looting that occurred in New Orleans and other locations.
From Horwitz’s perspective, the lesson of Wal-Mart and its Katrina response is abundantly clear. He believes future disaster relief operations should be de-centralized, with a far greater role for private sector responses. With their superior supply-chain management, delegation of authority and willingness to take risks in a competitive market, the big-box retailers can rapidly move large quantities of supplies to affected areas and improvise when necessary, adjusting to meet changing needs or particular local requirements.
By comparison, government organizations like FEMA are highly centralized and hide-bound, encumbered by layers of bureaucracy and red tape. Not only did FEMA rebuff offers of assistance from Wal-Mart and other retailers, it also rejected volunteer doctors, fearing potential liability issues. Against that backdrop, is it any wonder that Wal-Mart beat the feds to New Orleans?
In fairness, Dr. Horwitz observes that one federal agency was effective in the aftermath of Katrina. The men and women of the U.S. Coast Guard rescued more than 24,000 people in less than two weeks and assisted in the evacuation of 9,000 from hospitals and nursing homes damaged from the storm.
Why did the Coast Guard succeed when so many federal agencies failed? With its streamlined organizational structure, strong institutional culture, knowledge of the local area and empowerment of junior personnel, the Coast Guard had more in common with Wal-Mart than its parent bureaucracy, the Department of Homeland Security. Not surprisingly, Horwitz believes the Coast Guard and FEMA should be removed from DHS, a proposal we heartily endorse.
Almost three years after Katrina, the central Gulf Coast is still rebuilding, and the federal government’s failures have become the stuff of legend. Yet, relatively few Americans know about Wal-Mart’s role in saving lives and helping thousands of victims in Katrina’s aftermath. As Mr. Cosh notes, that doesn’t exactly fit the media stereotype of Wal-Mart:
We are told that the company thinks of its store management as a collection of cheap, brainwash-able replacement parts; that its homogenizing culture makes it incapable of serving local communities; that a sparrow cannot fall in Wal-Mart parking lot without orders from Arkansas; that the chain puts profits over people.
So, it’s little surprise that the American press has largely ignored the Horwitz study, which was posted more than a week ago. U.S. readers who want to learn more about Wal-Mart’s response to the Katrina disaster must go to the Mercatus Center website. Or a Canadian newspaper.