How the LA wildfires may impact supply chains

The LA wildfires could disrupt supply chains across the U.S., according to Dale Rogers, a professor at ASU’s W. P. Carey School of Business. He joined “Arizona Horizon” to discuss the L.A. wildfire effect on supply chains.

Businesses and consumers should anticipate delays, shortages and increased operational costs. This is likely because power outages, evacuations and closures of key transportation routes have disrupted production and distribution networks in the Southern California region and beyond.

“All big companies know how to handle an emergency,” Professor Rogers said.

While the Ports of Long Beach and Los Angeles are outside the state’s Red Flag Warning zone, transportation routes to and from those large hubs, some of the largest in the country, pass through affected areas, potentially disrupting access to both the ports and to Los Angeles International Airport.

“The problem is actually when you get out of there, there’s some rail slow down, there’s problem with trucks going to be rerouting, there’s likely to be more congestion,” Professor Rogers said.

The Port of LA’s activity was up 40% in 2024. The gasoline supply line between California and Arizona was also shut down last week for two days but is now open.

“For one thing, think about the sucking of the construction, construction costs already are too high. We’re likely in the next four years to be tougher about things across the border, remember how much inflation went up when we sort of stopped Canadian lumber,” Professor Rogers said.

Locally speaking, Professor Rogers said the effects are good for Arizona because of the population that is expected to move from California. He says maybe some people will be happy to move away from the high costs of California.