As climate change worsens, many natural disasters and destructive weather events are likely to occur at higher rates. According to many climate change models, Atlantic Ocean hurricanes may increase in frequency and intensity. This threatens lives and it also threatens businesses, both in the Caribbean and elsewhere.
Supply chain problems
Small- and medium-sized enterprises, or SMEs, have long focussed on the sustainability, stability, and efficiency of their supply chains. The general public has become more aware of supply chains since the Covid-19 pandemic began. Staffing issues caused by the coronavirus caused supply chain disruptions across many industries. Weather is another factor that can affect supply chains.
In 2020, The National Oceanic and Atmospheric Association, or NOAA, monitored a record-breaking Atlantic hurricane season with “the most storms on record.” This data corresponded to NOAA’s predictions for earlier in the year. Worryingly, NOAA has predicted an above-average hurricane season for 2022, too. The agency is forecasting a range of storms with a 70% confidence.
Severe storms can cause billions of dollars in losses for shippers and carriers. Damage to physical assets and disruption to operations can disrupt and cripple SMEs, importers,exporters, and shippers. And it’s not just the storms themselves. Predictions of high storm activity can cause insurance rates to rise, hurting what are already often-thin profit margins.
The Atlantic hurricane season
The Atlantic hurricane season runs from June to November and typically sees tropical storms pick up steam off the coast of Africa and move west, often causing the most damage in the Caribbean and the Gulf of Mexico. Coming into the 2022 season, there have already been plenty of supply chain issues, largely because of the Covid-19 pandemic. Restricted product flows and logistical bottlenecks have caused major cargo backlogs and delays at important seaports. This has led to a significant reduction in air freight, trucking, and warehouse capacity.
SMEs, importers/exporters, and cargo shippers are best served by a proactive, risk-based approach to managing their supply chain. By carefully examining your supply chains and inventory management programs, and by collaborating with your service provider partners, you can develop contingency plans that effectively mitigate risk and prevent supply chain disruption.
Cargo insurance
Paying insurance is often annoying, but finding the right coverage can make a huge difference for an SME. Proper cargo insurance coverage is crucial to supply chain risk management and mitigation strategy, especially in trying times. As an SME, you need financial protection against the potential of lost or damaged goods or products as they move through the Atlantic supply chain.
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