Seaports in Asia face escalating effects of climate change
Seaports are global trading channels. They accommodate the transportation of essential goods, materials, and machines that help drive economic development. However, the disasters caused by climate change adversely affect operations in shipping ports which hamper the supply chain.
In December 2022, a rare incident of severe winds caused havoc and moved stacks of containers happened at Singapore’s Keppel Terminal. There were no casualties. The Maritime and Port Authority of Singapore inspected the place while the PSA Corporation Ltd. recovered 15 empty containers in the water.
The occurrence is only one of the many cases that involved harsh weather conditions. In the past, seaports not just in Singapore but all over Asia have experienced erratic effects of climate change.
“There is copious and irrefutable evidence that climate change is happening, but a lot of it is not immediately apparent to the average person,”
Director Miranda Massie of the Climate Museum shared to Yale Sustainability, an offshoot online platform of Yale University.
Intensifying environment and weather conditions
An increase in sea level and disruptive weather conditions distresses water transport. A high sea level could jeopardize the seaports on a low-lying island such as Singapore.
According to the National Climate Change Secretariat, only 30 percent of Singapore is less than five meters above the height datum. In this sense, the varied topography of Asian countries also contribute to the intensity of climate change effects that hampers shipping and receiving in trading ports.
The World Meteorological Organization stated that Asia has incurred damages amounting to US$35.6 billion due to weather and water hazards. About 80 percent of the said hazards are storms and floods.
Out of the 48 countries in Asia, the Philippines, Myanmar, Thailand, Nepal, Bangladesh, and Pakistan ranked in the top ten most affected from 2000 to 2019. This is based on the Global Climate Risk Index (GCRI) of the environmental group, Germanwatch. The GCRI contain an analysis of the most affected countries by climate change worldwide.
Subsequent to Puerto Rico and the top two on the list is Myanmar. The latter experienced a constant increase in rainfall in coastal areas. The assessment report on Myanmar by a Red Cross team found that more than one cyclone makes landfall on coasts every year. In the past, only one cyclone happens every three years.
Additionally, the team stated that there’s an average of 2500-5500 mm yearly rainfall in coastal regions . If left unchecked, ships and people may face danger. The trading ports also would have a higher risk of operation suspension due to bad weather.
The International Monetary Fund’s (IMF) “Asia’s Climate Change Emergency” data shows that 37% of weather disasters that occurred worldwide from 2000 to 2019 happened in Asia and the Pacific. The IMF noted that certain countries in Asia and the Pacific aids in global warming.
In fact, half of the world’s carbon dioxide (CO2) come from the said areas. Apart from that, the existence of coal-based and carbon-intensive operations related to economic development renders pollution. To date, pollution is high in Asian cities such as Jakarta, Beijing, and Delhi.
Effect on the Economy
Asia includes countries that serve as significant ports. Based on the World Shipping Council data, there are 33 large ports in East Asia alone.
The port of Shanghai is the busiest and largest port in the world, with a 3,619km² area of coverage. According to an international shipping information bulletin, about 2000 containers visit the said port every month.
Unfortunately, pollution and deforestation that usher climate change are often consequences of urbanization or lucrative progressive markets. Asian countries are now threatened to pay the price of such economic developments.
The United Nations (UN) Port Industry Survey on Climate Change Impacts and Adaptation stated that the most common problems faced in ports are storm surges, rising sea levels, strong waves, and flooding.
In regards, the economic sector may face losses due to climate change by 2048. The prediction in the global industry is 18%, Asia is 37%, and the Association of Southeast Asian Nations (ASEAN) is 26%. These are the projections by Swiss Re’s Cherie Gray, Global Lead Sustainability and Market Development, and Lubomir Varbanov, Managing Director and Head of Public Sector Solutions in Asia-Pacific.
Although there are research on the estimated effects, the unpredictable nature of climate change makes forecasting weather and anticipation of its impact more challenging. In turn, the risk of physical damage and loss of lives is high in ports.
Port preparation and mitigation
In order to lessen the impact in Asia, several deemed climate change solutions were made. Raising awareness across regions as well as risk assessment and management, are two of the widely utilized means.
Conferences, meetings, and partnerships between countries helped usher initiatives in raising awareness and finding solutions to climate change. Some of these are through the ASEAN Summit, Tripartite Environment Ministers Meeting, and Regional Comprehensive Economic Partnership.
In terms of assessment and management, ports’ contingency and response practices are prioritized. Vaisala, a Finland-based company, shared that real-time alerts on weather conditions enable effective response. Specifically, climate change technology is important for creating a storm surge warning to prevent life-threatening scenarios.
There is also a need to produce a plan for resiliency purposes and allocate a budget for mitigation. Usually, compensation and cargo insurances exist for containers that are being transported.
Freight insurance protects the carrier. Cargo insurance is for the sender. Insurances have distinct coverages and stipulations. In some instances, general maritime accident insurance companies cover damages due to bad weather.
I’ve started to see an upward trend in the risk on the increased cost of insurance. For some who are unable to obtain business insurance, eventually, the increased cost will be passed down and handed back to the consumers,”
said Steve Tunstall, Director and Owner of Tunstall Associates which is a risk management, insurance, and resilience services provider.
Tunstall also noted that natural catastrophe is inevitable and there’s a higher risk than before. He deems that whether it’s the goods on the vessels or the port, Asia is facing unprecedented weather conditions.
Another initiative is port adaptation which is costly but has long-term benefits. Not only will the ports be able to address the effects of sea level rise, but they will also withstand the impact of harsh weather conditions.
In a study from HSBC and Asia Research and Engagement, the changes could amount to as high as US$49 billion. It includes making infrastructures resilient which had added heavily to the estimated value.
Stronger infrastructures render less or no damage during catastrophes which helps shipping ports avoid insurance payouts. More importantly, the transported cargo will be safe, and there will be no cut in the supply of traded commodities.
Weighing supply chain adversity in seaports
The supply chain continuously becomes disrupted because of the archaic effects of climate change on seaports. When seaports are unable to operate, trading is obstructed. The supply becomes lean, and the demand scales up. As a result, inflation happens.
Stakeholders in Asia must stay vigilant of the geographical challenges and calamities they might face. Among others, the rising sea level and strong typhoons threaten seaports.
Whether or not climate change will subside, only time can tell. After all, it is a repercussion perpetuated by exploitation and disregard of the environment. The best way for ports to cope is to prepare and do mitigation-related initiatives that can ensure an unceasing supply chain.
