Climate Change: How to Weather Supply Chain Disruptions

Climate change makes natural disasters more frequent, so shippers must respond to continuous supply chain disruptions. It’s drastically increasing the likelihood for extreme weather to cause supply disruptions, increases in resource scarcity, and health crises. Shippers can minimize these risks by understanding how climate change will affect supply.

Climate Change Disrupts Working Conditions

Extreme weather caused by climate change continues to displace and endanger people worldwide. This catastrophic trend affects workers in workplaces such as warehouses, factories, farms, and fisheries. Extreme weather can also cause damage to facilities and fields. This nightmare scenario occurred after a tornado struck an Amazon warehouse in 2021.

Sea levels also continue to rise every year, which further displaces workers and causes more facilities to become unusable. Airports and seaports become less accessible to shippers, causing massive delays and hazardous travel conditions for workers. To incentivize workers to endanger themselves with the risks of climate catastrophe, shippers may need to increase wages for workers overall. However, this trend of wage increases for the workforce may inadvertently cause prices to inflate for consumers.

Climate Change Disrupts Supply

Extreme weather and warming oceans have also affected supply levels in many industries, including agriculture, fishing, and lumber. There are increasingly frequent occurrences of wildfires, hurricanes, flooding, and droughts, making resources less renewable and less reliable for output. Demand is unchanged with this decrease so suppliers are forced to raise prices.

For example, according to The Wall Street Journal, the price of coffee doubled in 2021 after droughts struck Brazil. Other industries have experienced similar scarcity caused by climate change. Fossil fuel costs are also increasing, although the fossil fuel industry also has the most significant impact on climate change itself.

How Shippers Can Mitigate Risks

Leaders in every industry can reduce the effects of climate change on the supply chain by taking collective action to reduce greenhouse gas emissions. Most of what we consume is moved by ships, which means that shipping leaves one of the most impactful carbon footprints on our planet. One way to reduce this impact is to invest in fuels that produce fewer greenhouse emissions. In the long run, scientists also strongly advise collective investment in alternative energy sources.

Some organizations are already working on this, as the International Maritime Organization is aiming to cut emissions by 50% by 2050. They hope to achieve this by investing in wind power and solar power. Shippers can work within their networks to encourage more of this investment, in addition to appealing to government leaders in order to further demand the prioritization of green energy. Regardless of the size of a company’s carbon footprint, conserving resources wherever possible is a corrective action that leaders in every entity of the supply chain can take.

Building Supply Chain Resilience

Shippers can also strengthen the supply chain’s resilience by stockpiling supplies, rerouting cargo, improving safety conditions for workers, and building relationships with many carriers.

Preparing for the potential event of climate catastrophe is recommended for shippers who do not already have disaster plans in place. According to FEMA’s Supply Chain Resilience Guide, supply chains are most adaptive for survival when shippers collaborate with the public sector.

Many shippers also incorporate visibility tools into their logistics platforms to better monitor risks and adapt their supply chains accordingly. For example, CTSI-Global’s HoneyBee TMS™ incorporates more effective carrier communication tools, including access to over 20,000 shippers. When the Honeybee TMS™ is combined with CTSI-Global’s robust logistics management services and predictive analytics, shippers can be prepared to adapt in an emergency.

Now is the time to build up supply chain resiliency. Contact CTSI-Global to discuss your company’s disaster response plan.