This year started with record-breaking snowfall in Madrid, a ‘once in a generation’ storm in the UK and a category 5 cyclone hitting Fiji. This past summer, temperature records in the northern hemisphere tumbled with the US, Canada, the UK and Russia experiencing extreme heatwaves. This was soon followed by terrible flooding in Europe and China. Wildfires in Greece. Hurricane Ida in the US. This trend is well understood, and we know the cause – it is us. Climate change.
At Evolution, we have seen first-hand the impact that frequent weather events can have on supply chains. We are involved in numerous operations each year to solve blockages and overcome routine disruptions caused by weather events. Perhaps the most important factor to consider is that these disturbances are only set to become more frequent.
It is widely understood and reported that a key impact of climate change will be the increasing frequency and severity of extreme weather events. While these extreme weather events may not affect us all directly, they will almost certainly impact us indirectly. With the potential to disrupt global supply chains at numerous locations and times throughout each year, climate change is undoubtedly becoming one of the largest logistical risks of the 21st century.
With the 26th UN Climate Change Conference of the Parties (COP26) taking place from 31 October to 12 November in Glasgow, the world is coming together once again to accelerate action towards the climate goals laid down by the Paris Agreement and the UN Framework Convention on Climate Change. While efforts to lower emissions and adopt more sustainable practices are everywhere you look, even our most ambitious plans concede that changes have already occurred and will continue to do so.
McKinsey highlights that two critical automotive supply chains could be severely and directly impacted by weather events – semiconductors and heavy rare earth metals. The case study indicates the probability of a hurricane hitting the primary semiconductor producers (Korea, Japan, Taiwan) and other western Pacific freight locations will increase by two to four times. Equally, the world’s heavy rare earth supply, much of which is concentrated in south-eastern China, is likely to experience heavy (disruptive) rainfall two to three times more by just 2030[1].
In fact, a 2020 study highlights that weather events can no longer be accurately predicted with historical data[2]. We have seen this effect already, with the Yale School of the Environment highlighting that from 2000-2019 there were 7,348 major natural disasters resulting in over a million deaths and almost $3 trillion in global economic losses. And the previous 20 years? 4,212 natural disasters and $1.6 trillion in economic loss[3].
It is clear that global supply chains are at risk, but they are not helpless. While Evolution is well-known for its emergency logistics services, another area where many customers gain enormous benefit is in preparation. Working alongside Evolution’s experts, customers can develop thorough contingency plans, preparing their organisation for unforeseen circumstances, like extreme weather events.
As Benjamin Franklin said:
“By failing to prepare, you are preparing to fail.”
[1] https://www.mckinsey.com/business-functions/sustainability/our-insights/could-climate-become-the-weak-link-in-your-supply-chain
[2] https://www.science.org/doi/10.1126/sciadv.aay2368
[3] https://www.z2data.com/insights/weather-impact-on-electronics-supplychain
