Global supply chains, the arteries of our interconnected world, face a growing threat: rising flood risks. A new report on Forbes warns that extreme weather events are increasingly disrupting vital infrastructure and transportation networks, posing serious challenges to efficient end-to-end logistics.
Brian Enright, CEO and Managing Director of DP World Americas highlights the stark financial impact of floods, citing a 2019 report that placed the cost at a staggering $82 billion, outpacing wildfire costs by elevenfold. The World Bank estimates $110 billion in losses from natural disasters in the first half of 2023 alone, with projections suggesting the figure could reach $1.2 trillion annually.
“These rising waters could endanger up to 3% of global GDP by the end of the century,” Enright warns, quoting the University of Melbourne. He emphasizes the vulnerability of supply chains, pointing to the 2011 Mississippi River floods that cost $300 million a day in transportation and the 2021 Thailand floods that disrupted car and electronics production, costing over $30 billion.
“Major floods have doubled in the past two decades,” Enright says, citing the UN Office for Disaster Risk Reduction. “It’s crucial for supply chain stakeholders to identify and build resilient networks.” He urges companies to adopt flood-proofing and prevention strategies, citing the mitigation efforts that significantly reduce losses.
“Active preparation is key,” Enright emphasises. “Companies that invest in proactive risk reduction experience less significant losses during disasters. This shapes processes, fosters adaptability, and establishes clear accountability.” He highlights DP World’s commitment to risk management and environmental stewardship through their involvement in the First Mover Coalition.
Technology offers powerful solutions, Enright argues. “Investing in tech and methodologies unlocks opportunities for cost-cutting and bolstering resilience.” He cites evolved cargo storage systems, sophisticated surveillance and analytics tools, and intelligent infrastructure as key examples.
“Foresight is critical,” Enright adds. “We need comprehensive strategies to combat flooding. Evolved storage, smart detection, vertical storage innovations, and employee training are essential.” He emphasises the importance of sustainability and collaboration, quoting Bill Gates: “Climate’s impact on business could surpass the past five decades within the next 10 years.”
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