Climate Change and the Maritime Industry

Maritime shipping boat
Maritime shipping is particularly vulnerable to climate change. (Image source: www.internationalshipping.com)

If there is a front line in the war on climate change, it is the world’s coasts. And if there will be casualties from the hard-fought battle, the hardest hit could be the maritime shipping industry.  This was the case in 2005 when Hurricane Katrina charged into Louisiana, battered the Port of Gulfport, handily tossed aside shipping containers, prompting $250 million worth of repairs.

The maritime shipping industry, comprised primarily of ports and shipping companies, is positioned in a truly difficult spot when it comes to dealing with the adverse effects of climate change, which will be hitting the industry from all angles.

First and foremost, sea level rise – caused by melting glaciers and the expansion of ocean water as it warms – threatens port infrastructure, which is by necessity situated at sea level. It’s worth noting that the rate of sea level rise is slow and varies a great deal from location to location. According to a 2011 survey, many ports note that they tend to plan with less than a 10-year outlook, although infrastructure is built to last multiple decades. So although sea level rise will occur at what may seem like a snail’s pace, the change is certainly large enough to be a factor when considering the current state of the industry’s planning and building practices.

Ships pile up on land after Hurricane Katrina
Ships pile up on land after Hurricane Katrina (Source: NOAA)

Of course, sea level rise itself is not the main direct impact, it is what happens because of it – more frequent and intense flooding. As sea level rises, it will take increasingly weak storms and their resulting storm surges to impact infrastructure on land. This is not just an issue for port infrastructure. Inundation from storm surge can impact the operations of port facilities by preventing laborers from getting to work, by increasing downtime and consequently delays, or by raising costs from relocation or repair of flooded facilities.

 The list of direct impacts for the maritime shipping industry are numerous: higher temperatures increase refrigeration costs, increased storminess could force longer and more expensive shipping routes, or intensified rainfall events delaying loading/unloading of cargo at ports.

 While these impacts are highly concerning, the degree of their impacts can be reasonably well understood, and actions can be taken directly by ports and shipping companies to mitigate their risks.

Perhaps more disconcerting are the indirect impacts that climate change presents to this industry. Widespread climate change will bring macro-level changes to the demand and supply of goods handled by shipping companies and passing through ports.

DroughMississipiRiver
The 2012-2013 drought in the Midwest stranded dozens of ships on the Mississipi and impacted supply of agricultural goods (Source: Bloomberg)

Take for instance the largest port in the country, the Port of South Louisiana, which lies along the southernmost stretch of the Mississippi River and processes 60% of the Midwest’s grain exports. As drought and extreme heat continue to ravage the region, corn, soybean, and wheat output from states like Missouri, Iowa, and Illinois, which traditionally export their product via the Mississippi River, will plummet. The indirect consequence is that shipping companies will have less demand for their services, and ports will not earn as much profit as the quantity in business diminishes.

The maritime shipping industry is directly in the cross hairs of climate change, and yet strikingly few port administrators are planning for its consequences. Depending on location, infrastructure, and products, there are myriad negative consequences that will be felt by shipping companies and ports. It is time for this sector to prepare for changes and ensure that they can rebound from disasters and be responsive to a changing climate.

By Colin Gannon