The impact of global weather patterns continues to reverberate across industries, inf luencing everything from sourcing strategies to shipping operations.Bjorn Vang Jensen, executive director, global transport at Cummins warns supply chain professionals to keenly assess the ramifications of the newly announced El Niño on their operational landscapes.“I am often asked what keeps me awake at night when it comes to our supply chain. It is a super-pertinent question with no obvious answer,” he said during a recent online event. “The most daunting threats to our supply chains are often those nearly insurmountable challenges, and this worrisome reality demands our attention.”He noted that catastrophic events, distinct from traditional black swan occurrences, were becoming more frequent. "In the aftermath of the pandemic, a basic comprehension of black swan events exists for everyone. Their utter unpredictability challenged our preconceptions. However, that's not the focal point. The concern lies in the repercussions of events like this year's July-declared El Niño, a far more disquieting prospect."El Niño, a recurring phenomenon that impacts sea surface temperatures in the central-east equatorial Pacific, is more than an intriguing and sporadic meteorological occurrence. Its track record showcases its capacity to upend economies, sourcing methodologies, and worldwide trade f lows."While we're aware that El Niño emerges approximately every seven to eight years, its precise implications for our supply chains remain elusive. This extends beyond a mere meteorological consideration. El Niño possesses the capability to sow utter chaos within global trade, a potential outcome that defies prediction."Amidst mounting forecasts of reduced rainfall, a notable consequence looms for the shipping realm: diminished water levels within rivers and canals. "I'm not suggesting the Panama Canal will shut down, but it's certainly experiencing water scarcity, and this cascades into substantial trade disruptions. In Europe, an immense volume of cargo relies on river barges. When water levels recede, cargo bears the brunt," warned Jensen.Xeneta, a market analysis firm, has already highlighted a shift in carrier strategies, as they opt for smaller vessels with reduced cargo capacity. "The tempestuous and turbulent seas necessitate the utilisation of smaller vessels, which, in turn, is poised to trigger delays and bottlenecks across intricate supply networks," Jensen cautioned. He emphasised the practical uncertainty of the forthcoming months. "Unpredictable storms and weather patterns hold profound significance for container shipping and logistics. It's a fallacy to disregard their consequences."
