The recent Eaton and Palisades fires in Los Angeles have underscored a significant vulnerability in the logistics sector: a heavy reliance on outdated, non-digital systems. While major freight hubs and highways weren’t directly impacted, the disruption to logistics workers—many of whom were displaced—had a ripple effect throughout the supply chain. Schools were closed, 180,000 people were evacuated (200,000 under warnings), operational delays piled up, and the backlog of work grew, all of which added to the already strained system.
The reality is that about 50% of small and mid-sized logistics companies still depend on paper-based or non-digital systems. This makes it incredibly difficult for these companies to adapt quickly during crises. Without access to real-time data or cloud-based systems, they struggle with remote coordination, slow decision-making, and a lack of operational continuity. In fact, McKinsey & Company found that the average supply chain has a digitization level of only 43%, the lowest among the five business areas they analyzed. This digital lag significantly hinders efficiency during disruptive events, further exacerbating the delays.
On the other hand, companies that have embraced digital transformation, like Freight Right, have been able to continue operations with minimal disruption. Our cloud-based infrastructure allowed for swift relocation and near-immediate resumption of services, demonstrating the practical benefits of digital systems in times of crisis. McKinsey’s research highlights that companies that aggressively digitize their supply chains can see annual growth in EBIT (Earnings Before Interest and Taxes) of 3.2% and revenue growth of 2.3%. This indicates that digital infrastructure not only helps mitigate disruptions but also drives tangible financial benefits.
The increasing frequency of disasters like the fires in Los Angeles is a stark reminder of the importance of digital readiness. Over the past decade, an average of 7 million acres have burned annually in the U.S., a sharp increase compared to previous decades. The rise in natural disasters is not a temporary trend—it’s a growing challenge that businesses can no longer afford to ignore. McKinsey notes that digital logistics capabilities can add significant value by improving operational performance, enhancing sustainability, boosting customer satisfaction, and even increasing revenue.
The Los Angeles fires, while devastating, also served as a reminder of how vital it is for logistics companies to modernize their systems. Those who have invested in digital infrastructure are better equipped to handle unexpected disruptions and maintain continuity. As climate-related events continue to increase, digital transformation is no longer a choice—it’s a necessity for logistics companies aiming to stay resilient, competitive, and profitable in an unpredictable world.
