This year, all our attention has been focused on the COVID-19 pandemic. But a longer-term threat still lingers on the horizon. Though slowed down slightly by the economic devastation of the pandemic, climate change has not gone away. What’s more, its predicted impact on sea-borne supply chains and trading networks should not be ignored.
The pandemic offers policymakers the chance to intensify their efforts to reduce greenhouse gas (GHG) emissions. But can we realistically expect them to grasp this one-off opportunity? More and more businesses are certainly giving due consideration to climate change in their balances, financial reporting and corporate communications, and as a response to growing regulatory pressure. But given the worst-case scenario of policymakers failing to take effective GHG reduction measures in the post-corona euphoria of economic revival, stakeholders in the shipping and ports industries would be well advised to take the effects of climate change seriously.
Two consequences pose a serious threat to sea freight and seaport infrastructure. In past decades, as globalised supply chains have become the rule, the world economy has favoured efficiency rather than resilience in sea-borne supply chains. Consequently, the risk to trading networks from climate change was largely overlooked. Seaports handle huge quantities of goods. A natural disaster that swamps a major seaport or causes a widescale power outage would have far-reaching effects. A paper on “Sea-level rise in ports: a wider focus on impacts” published in October 2018 assesses the impacts of climate change of seaports for different global warming level scenarios. The authors’ conclusion is clear: In the high emissions-high warming scenario referred to as RCP8.5, the majority of European ports exposed to extreme sea level rises higher than 4.5 m will be located in Spain, UK, Ireland, Portugal and Norway. In the Black Sea and Mediterranean the impacts are expected to be significantly milder. Seen from this perspective, there is a clear need for much more resilient solutions – not just in Europe – to safeguard sensitive supply chains from damaging disruption, e.g. in the automotive, consumer electronics or semiconductor industries.
Changes in sea levels due to changing climatic conditions are having diametrically opposite effects. In the Suez Canal (8% of global trade) and the Panama Canal (4%) water levels are falling, forcing ships to carry less cargo. In contrast to that, the general rise in sea levels predicted during the course of this century threatens low-lying seaports. Here, too, appropriate infrastructural action is needed. Ensuring a higher degree of climate resilience is a task port authorities, suppliers and transporters can no longer afford to ignore. In California’s five Bay Area seaports, for example, stakeholders have recognised the threat of higher sea levels and launched an “Adapting to Rising Tides” initiative to raise awareness and mitigate the vulnerability of the seaport facilities and associated hinterland services.
The situation becomes all the more complex if the uncharted ongoing impact of the COVID-19 pandemic is included in the climate equation. Will the partial reversal of the decades-long globalisation trend in trading networks lead to lower volumes of sea-borne traffic and tighter margins in this sector? If so, it will be all the more important for sea-borne transport stakeholders to safeguard these trading routes and their cargo-handling facilities. Here, FleetMon’s data-driven technology and customised APIs (e.g. ETA calculations for seamless supply chain tracking on the Seven Seas) can make a decisive difference. Reach out to talk to our Sales team.