Experts predict rising supply chain disruption due to climate change and the collapse of transport networks due to volume. No doubt, extreme weather can cause damage and delay delivery. Growing volumes and shorter time constraints have already led to larger transport vehicles that strain network capacity. My biggest concern is that companies tend to consider this some future scenario, not a clear and present threat. They should be minimising risks to avoid financial losses NOW!
While many climatic disasters, such as the floods in Pakistan, seem miles away from Europe’s distribution chain, there are more and more alarming examples of the impact of climate change and network stress right at our front door:
Heat wave in Germany melts motorways and stops trains
In July, Germany recorded its highest ever temperatures – 37°C for several days in a row! Highway asphalt surfaces blistered and broke. The repair costs will drain budgets while road works will cause congestion. Imagine the strain on the roads of longer and more frequent periods of high temperatures. Product shortages and slower production will ensue. And spare a thought for the poor customers of Germany’s high speed trains (ICE): the air conditioning failed, causing temperatures to rise as high as 70°C. This only affected passenger trains, but unusually long periods of heat also pose a threat to goods requiring temperature controlled storage.
Deepen the River Elbe, Frau Merkel!
During a recent visit to China, Chancellor Angela Merkel was urged to deepen the Elbe, a project much discussed but postponed due to political and environmental factors. In the logistics/distribution sector, speed to market is critical because of its cost implications. The port of Hamburg is one of the biggest ports in Europe and attracts large trade volumes from Asia-Pacific; however, its access is impaired by the depth of the Elbe. In 2009, Hamburg’s throughput traffic fell, putting it behind Rotterdam and Antwerp in the European port rankings. Going forward, accessibility will be key to competition and cost and those ports guaranteeing 24/7 accessibility will beat the competition. Therefore, have Elbe deepened, Frau Merkel or Chinese (and other) companies will divert their shipping to other ports!