How The Water Crisis Will Affect Cargo Transit

It goes without saying that without water, a business stops functioning in the same way a human body stops functioning without water.

Besides being essential for life as well as how a water deficit of as low as one per cent can affect cognitive performance, water is a necessity for the direct functioning of many businesses, and most industries from data management to heavy industry can see directly where water plays a role.

However, there is perhaps no industry more reliant on water than long-distance shipping and transit, as the most efficient (and in a lot of cases only) way to deliver cargo to a destination is across the sea.

According to the World Economic Forum, 90 per cent of products travel across global waterways and situations such as the blockage of the Suez Canal in 2021 demonstrated the chaos that can emerge when vital trade arteries cannot flow as expected.

However, a growing water crisis, increase in flash droughts and more extreme weather conditions brought about by climate change has the potential to fundamentally change the entire face of cargo transit, and some of the effects are already being felt.

The Plight Of The Ever Max

Constructed in 2023, the Ever Max is a neopanamax ship that was designed to travel through the Panama Canal, one of the most important waterways in the world.

However, within months of its construction, the largest box ship to ever travel through the canal had to unload over 1400 shipping containers at the port of Balboa to meet current stringent depth restrictions brought about by flash drought conditions.

According to coverage in Seatrade Maritime News, these remaining containers were instead transported via overland routes using cargo trains and trucks before being reloaded onto the Ever Max for its final journey to Savannah, Georgia.

This single diversion is expected to cost over $1.5m in total, and the total cost to the Panama Canal Authority could be as much as $200m of lost earnings in 2024 if the current conditions continue.

This situation, alongside the grounding of the Ever Given and the concerning low levels of other waterways such as the Rhine in Germany are causing logistics companies and transport shippers to consider contingency more than ever, and port authorities to look at more dramatic solutions.

Drastic Solutions For Drastic Problems

Whilst there are a range of potential solutions for solving other problems caused by flash droughts such as water harvesting and desalination, there are far fewer ways to fix not having enough water in canals and waterways for ships to sail through them at full capacity.

What solutions are available will depend on geographic location and individual circumstances, but there are longer-term solutions and changes in shipping behaviour that are likely to take shape in the medium and long-term future.

In terms of short-term solutions, one of the most common and straightforward is dredging, where underwater material is excavated to make a body of water deeper and something that was considered when the Rhine reached its lowest point as well as the Mississippi River in the United States.

Replenishing rivers through the use of reservoirs can be a potential option if there are sufficiently filled bodies of water on the upper parts of a river, as was the case with the Yangtze River in China in August 2022.

Beyond this, setting rate, capacity and depth limits as well as redirecting some cargo to travel via other means can help in the short term to avoid turning a drought into an outright crisis, the most important change in logistics will be a shift in mindset.

Far too often, droughts are seen as a sudden, unforeseeable and shocking natural disaster, rather than as a consequence of climate change and an inevitable risk that should be managed and prepared for as far in advance as possible.

Drought monitoring is somewhat more difficult than monitoring more overt natural disasters such as hurricanes, typhoons, storms and volcanic eruptions, largely because in the majority of cases the effects of a drought can slowly creep up for a long time.

This can make it difficult to define in the early stages the difference between a heatwave and a drought, and because average temperatures are so variable between different regions, what can be a drought in one place may be considered normal in another.

This means that drought conditions will be largely monitored relative to the area being monitored, and looking for indicators that suggest shifts in indicators such as rainfall, average temperature, water levels of reservoirs and groundwater, soil moisture level and other markers that suggest the potential for drought conditions.

Typically a combination of many different data-driven approaches is used because the earlier a potential water shortage is diagnosed, the earlier mitigation strategies can be implemented and the greater the chance that crisis management strategies can be avoided.

Ultimately, however, more intense drought conditions are inevitably going to become more common unless global temperature increases can be limited as much as possible, ecosystems that help to protect against drought conditions are restored and everyone plays their part to protect the world’s water as much as possible.

As water is the lifeblood of every person and every business on the planet, solutions to protect water supplies will be holistic and involve every industry playing their part and using water as efficiently as possible with a mindfulness of their effects at scale on their environment.

What Happens Next?

If that does not happen, then droughts will intensify, and the places they will hit most will directly affect shipping businesses.

Waterways and canals are often only as deep as is necessary for ships to pass through them under normal conditions, which means that the margins for error are much smaller than they are on the open water.

In particularly egregious conditions, the Panama and Suez Canals may become impassable for large stretches of the year, requiring boats to take far more dangerous and longer routes, often extending shipping dates by weeks as a result.

Alternative transport routes are not available at scale so navigating the water crisis will involve ensuring that it does not get any worse.