$81 billion systemic impact to supply chains from climate risks

Disruptions to ports from climate extremes can have systemic impacts on global shipping, trade and supply chains, according to a new study.

The paper, in Nature, says that by combining estimated climatic-related port downtime at 1,320 ports with a global model of transport flows, it pinpointed systemic risks to global maritime transport, trade and supply-chain networks, estimating a total of $81 billion of global trade and at least $122 billion of economic activity being at-risk on average annually.

According to the paper, some of the most at-risk supply chains are wood and paper manufacturing in Taiwan and South Korea, mining and quarrying in France and petroleum, chemical and non-metallic mineral products in Macau and Aruba. 

In terms of industry output, the most at-risk supply chains of >US$1 billion output are the mining and quarrying industry in Hong Kong, textiles and wearing apparel in Mauritius, electrical and machinery in the Philippines and transport equipment in South Africa and the Dominican Republic.

According to the paper: “Our results highlight the scale of global trade and economic activity exposed to port disruptions and pinpoint the systemic vulnerabilities within maritime transport, trade and supply-chain networks. The results highlight that many SIDS are very susceptible to systemic risks given high direct exposure and cross-border vulnerabilities due to limited trade and transport diversification.”

The full paper can be accessed here.