October 14, 2024
Hurricanes and typhoons are likely the most important source of disruption to modern day ocean trade. And these last couple of weeks have been a powerful reminder of just how much they can impact existing trade routes.
In the span of two weeks, major ports in North America were struck by two powerful hurricanes. First, Hurricane Helene, which hit the southern U.S. as a category four weather event at the end of september. Then, just two weeks after, Hurricane Milton hit Florida as a category three weather phenomenon—and one of the most powerful Atlantic storms ever recorded. Two powerful storms hitting major ports in a span shorter than a month.
And it’s not just the U.S. Roughly a month ago, typhoon Bebinca became the first weather phenomenon of its kind to impact the port of Shanghai in over 70 years. When Bebinca first hit, we estimated a potential disruption of between 230,000 and 460,000 TEUs. Similarly, a number of severe storms in the Cape of Good Hope have resulted in several containers being lost at sea throughout 2024.
Not surprisingly, earlier this year, we estimated that any additional hurricane in North America alone could result in disruptions worth between 1.2 and 1.6 million TEUs. And that is just speaking of a single hurricane. Odds are that, in the near future, with the rise of climate change, such weather phenomena will become ever more common.
This week, we wanted to expand our analysis further and look beyond North America. Namely, how are hurricanes impacting trade globally and where are the places most likely to suffer disruptions in years to come?
To answer this question, we relied on two crucial data sets. The first of them comes from the International Monetary Fund (IMF) which has accurately tracked all weather phenomena that resulted in meaningful trade disruptions since 2019. Using their data, we were able to map all the most meaningful hurricanes and typhoons over the last five years, as shown in the map below:
Each of the figures in the map (displayed in light green) represent a tropical cyclone that reached a concern level of category red—namely, the highest possible concern level to trade. Almost immediately, we notice three key clusters of activity. One on the Gulf of Mexico, impacting Mexico and U.S. ports. A second cluster around India due to minor cyclones emerging on the Indian Ocean. And, finally, a major cluster of typhoons in the South China Sea that encompass the bulk of weather activity.
Now, we wanted to use these polygons to map which ports were located along the path of severe storms over the last five years. To do so, we relied on data from the World Bank which provides precise coordinates for all major ports in the world. Thus, analyzing the overlap between weather events and ports, we were able to isolate the ports which have been impacted by hurricanes or typhoons over the desired period.
Furthermore, since the World Bank also measures the traffic of goods at each port listed, we were able to map out just how relevant each port is to global trade. In the figure below, we use outflows from the port as a means to quantify their relevance —a measurement developed by the World Bank regarding each port’s activity. Again, we notice a major cluster in Asia, where, unfortunately, some of the world’s most important ports are located along the routes of devastating weather events.
Crucially, given that the World Bank has traffic data for all ports in the world, we can easily find the share of traffic that has been in the path of weather disruption and the share of traffic which has not been in such paths. Although, it is worth noting that World Bank Data is limited to 2019—the last year in which outflows were updated—while our analysis goes beyond that initial time frame. This, however, should be seen as an initial approximation to the impact of hurricanes on global trade.
Using this methods, then, we were able to estimate that, over the last four years, 27.6% of all trade in the world has been subject to at least one weather disruption. Again, as the above maps show, the bulk of these disruptions come from ports in Asia, where typhoons are the norm. But, in general, this data suggests that over a quarter of all ports in the world have suffered from disruptions from weather events over the last half a decade.
Moreover, we were able to find a number of ports that suffered not just one disruption in the examined period. In fact, just 45% of ports considered suffered a single weather disruption over the last five years. Conversely, 55% of ports have suffered from more than one disruption in the time mentioned. Of which, 29% suffered from two disruptions, 13% from three, and an additional 13% suffered four disruptions over the last half a decade. Amongst the ports that suffered the most disruptions we found the likes of Manila in the Philippines (four disruptions) and Taipei in Taiwan (three disruptions).
Thus far, data suggests that hurricanes are already a great source of disruptions to global trade. One that impacts over a quarter of all global commerce. But, moreover, one that will likely grow in prominence in the coming years as climate change increases the number of hurricanes as well as their intensity.
At Auba, we believe logistics operators would have all the relevant information to respond to these crises and the visibility needed to know which ports are at risk. That is why we are building a comprehensive logistics copilot to help bring your operations to the next level. If you’d like learn morea, make sure to schedule a demo:
