Climate change is significantly affecting global trade and economic development. Extreme weather events disrupt supply chains, damage critical transport infrastructure, and limit mobility. Maritime transport is particularly susceptible to climate-related risks. Rising sea levels threaten port operations, while changes in precipitation affect critical shipping hubs and routes.
Over 80% of global trade in goods and commodities relies on waterways for transportation. However, climate change poses significant risks to the efficient operation of these waterways, canals, and seaports, making it a critical threat to global trade. While droughts are often highlighted as the primary way climate change disrupts waterborne trade—such as reducing water levels in critical routes like the Panama Canal to levels impassable for large cargo ships—they are not the only concern. Rising global temperatures, sea level rise, and the increasing frequency and severity of extreme weather events also jeopardize the functionality of seaports worldwide.
The Panama Canal, which handles 50% of trade from Asia to the U.S. East Coast and facilitates the movement of goods worth $500 billion annually—two-thirds of which is destined for the United States—has been severely impacted by unprecedented droughts. As water levels in the canal decline, authorities have reduced the number of vessels permitted to pass through each day by 50%. This disruption has led many shipping companies to abandon the canal altogether in favor of the longer route around the Cape of Good Hope, resulting in a 14% increase in dry bulk shipping costs compared to the previous year.
Additionally, rising sea levels pose a significant threat to the functionality and viability of seaports worldwide. According to the Global Maritime Trends 2050 report, major seaports such as Shanghai, Houston, and Lázaro Cárdenas could become inoperable by 2050 if sea levels rise by just 40 cm—a scenario that is highly probable if current global warming trends are not urgently addressed.
Simultaneously, the increasing frequency and intensity of storms are further disrupting the operations of both seaports and inland ports. Severe climate events are estimated to cost global ports approximately $7.5 billion annually. Furthermore, 0.8% to 1.8% of global maritime trade—valued at $200 billion to $450 billion per year—is at risk of disruption due to extreme weather. Small Island Developing States face an even greater challenge, experiencing trade disruption risks nearly four times higher than those of other economies.
Seaports are important to global trade and the growth of the Blue Economy. They are critical gateways to global markets and supply chains, enabling maritime transport, fisheries, offshore energy development, and various economic activities in coastal regions. With over 80% of global trade volume transported by sea, seaports are critical infrastructure nodes supporting international supply chains. They are particularly significant for developing nations, which currently account for approximately 60% of goods loaded and unloaded globally.
However, the geographical positioning of ports—often along open coasts or in low-lying estuaries and deltas—makes them highly vulnerable to natural hazards. These include climate-induced threats such as sea-level rise, storm surges, high winds, waves, and flooding, as well as tectonic events like tsunamis. These risks highlight the strategic importance of improving port resilience to climate change for the sustainability of the global economy and society.
Climate-related disruptions to port infrastructure and operations can result in substantial economic losses, particularly in regions affected by tropical cyclones and associated storm surges. The cascading effects of such disruptions on interconnected global supply chains further highlight the critical need for proactive resilience-building measures. The interconnected nature of global value chains also magnifies the impact of localized disruptions on the broader economy. When disasters strike regions producing specialized, hard-to-replace goods, the repercussions are felt globally.
Global warming, driven by greenhouse gas emissions, exacerbates these risks. The Earth’s average temperature has already risen by over 1.0°C above pre-industrial levels, with projections indicating a rise to 1.5°C as early as the 2030s. A 2°C increase—a threshold often regarded as dangerously high—could be reached by the 2050s, depending on future emissions trajectories. Many countries have accelerated climate ambitions, the latest UNEP Emissions Gap Report warns that the planet is on track for a temperature rise exceeding 3°C this century. This scenario far exceeds the goals of the Paris Agreement, which aims to limit global warming to well below 2°C and preferably to 1.5°C.
Climate change also disrupts manufacturing supply chains through its effects on transportation and agricultural inputs. Rising temperatures reduce worker productivity and operational hours due to heat exhaustion and equipment failures. These disruptions can lead to shortages, further straining supply chains. Additionally, high temperatures increase the cost of trade by driving up expenses for cooling storage facilities.
Given the critical role of seaports in global trade and their vulnerability to climate-related hazards, building climate-resilient port infrastructure is an urgent priority. It is key to mitigating economic losses, safeguarding supply chains, and supporting sustainable development, particularly for the most vulnerable coastal and developing states.
As climate change intensifies, the frequency and severity of droughts, floods, tropical storms, and other natural disasters are escalating, posing significant threats to maritime infrastructure. These challenges require urgent and coordinated responses that go beyond individual governments’ capabilities.
A more effective multilateral approach is important to mitigate global warming and develop frameworks for cooperation, addressing both existing trade routes and emerging ones. Governments alone cannot shoulder this burden. A new multilateral framework must include active participation from private sector stakeholders, international organizations, academic institutions, and civil society to create comprehensive and innovative solutions. Failure to act decisively risks not only disrupting trillions of dollars in global trade but also jeopardizing the stability and growth of the global economy in the decades ahead.
As climate challenges increasingly impact global trade, business owners must adapt by building resilience into supply chains, assess climate risks, diversify logistics strategies, and invest in sustainable practices to minimize disruptions to their goods. At Translindo, we are committed to conducting business in an environmentally responsible manner, integrating green logistics and innovative solutions to reduce our environmental footprint. By choosing Translindo, you partner with a company that prioritizes environmental protection, assisting trade operations to thrive efficiently but also contributing to a more sustainable future.
