In its 2024 annual report, Everstream Analytics identifies climate change as the leading cause of supply chain disruptions in logistics for the coming year, surpassing environmental regulations and the ongoing U.S.-China trade war. From extreme cold, which alone causes $3.5 billion in annual losses in the United States, to scorching summers with risks of floods and storms, the increasingly frequent adverse weather conditions are causing costs and delays that ripple through the entire supply chain.
Analysts predict that weather events such as hurricanes, winter storms, wildfires, and floods will be the primary causes of supply chain interruptions this year. The report, created using a combination of human intelligence and artificial intelligence, highlights the example of the Panama Canal, which is experiencing its worst drought since 1950, forcing a reduction in the number of ships that can pass through daily.
Additional threats come from hurricanes, storms, and flash floods. For example, data from the United States on recent natural disasters are telling. Hurricane Ian, which hit California in September 2022, caused a 75% drop in shipments compared to previous weeks, with an average increase in delivery times of 2.5 days. In Texas, from February 11 to 20, 2021, an intense cold wave caused an average delivery delay of nearly two days. A year later, in Buffalo, the Christmas freeze from December 21 to 26 led to a 40% drop in shipments compared to previous weeks. The wildfires of June 2023 in Canada caused poor visibility as far as Chicago and New York, delaying deliveries by up to two days.
"Climate change is a significant challenge that the logistics sector is already facing,” explains Andrea Franceschelli, Vice President of the logistics company Due Torri. “Extreme situations can jeopardize the supply chain, so it's crucial to be prepared. On one hand, it is important to invest in sustainable technologies; on the other, it is necessary to develop emergency plans to manage supply chain disruptions."
During the summer, the risk of floods is particularly concerning as it can damage roads, bridges, railways, warehouses, and other crucial infrastructure for logistics. Extreme heat can also compromise perishable goods such as fruits, vegetables, pharmaceuticals, and dairy products, which are highly sensitive to temperature fluctuations. Maintaining a controlled temperature throughout the supply chain thus becomes a fundamental challenge to ensure these products reach consumers in optimal condition. Even maritime transport is at risk during the summer months due to tropical cyclones that can close ports and make navigation dangerous.
According to Forbes, extreme weather events like heavy rain, snowstorms, and strong winds account for an average of 23% of all truck transport delays in the United States, costing the industry nearly $3.5 billion annually. Additional consequences include repair costs for damage to infrastructure and goods, rising insurance premiums, and lost sales due to delivery delays. Lastly, extreme weather can create hazardous working conditions for logistics workers, increasing the risk of accidents and injuries.
In response, experts from Due Torri offer five tips to prepare for the challenges of climate change in the freight transport sector: optimize routes; improve weather forecasting tools; promote sustainability; strengthen infrastructure and warehouses; and develop detailed contingency plans.
