The future of some of the world's most important shipping lanes - including the Suez and Panama canals and other sea-facing port and terminal infrastructure - could be impaired from risks associated with climate change according to a new paper published by Marsh.
The paper said this could have implications for regional economies, global food security, and supply chains in the medium and long term.
The paper, High seas: Enabling a climate resilient Suez Canal, includes modelling data, examines how physical climate change-related risk is impacting major waterways, with the Suez Canal as a case study, and outlines methods to build resilience at a local level.
According to the new research, rising physical climate risks, such as coastal inundation and extreme heat and wind events, could directly impact key shipping lanes and associated operations at ports and terminals along the routes.
The paper highlights that rising sea levels are linked to coastal inundation risk and could challenge the integrity of infrastructure and port operations along the Suez Canal due to potential disruption to the loading, unloading, and movement of cargo. Further, the report states it could also affect the placement of infrastructure, including transportation and communication networks, industrial sites, housing and sanitation systems.
In addition to potential navigational issues, the impact of an increase in extreme heat events can vary from productivity loss, such as impairment of the operations of businesses that use waterways and ports, to changes in sea salinity and density which affects engine cooling efficiency.
While extreme heat events may not have an impact on the waterways directly, the report notes that broader risks arising from extreme heat could have other impacts which result in increased costs and delays for ship-owners and cargo.
Marsh head of climate and sustainability risk Nick Faull said, “The Suez and Panama Canals, the Straits of Hormuz, the Bab-el-Mandeb, and the Straits of Malacca rank among the world’s most important waterways and represent a significant source of national income for countries that support trade along these routes. Climate-related events, such as the high winds that played a role in the grounding of Ever Given in 2021, could impair their long-term viability.”