Preparing for Storm Season: Ensuring Supply Chain Resilience in Asia
As we enter storm season, businesses operating in Asia must be prepared for potential disruptions caused by typhoons and severe weather events. Last year’s storm season offered valuable lessons on how unanticipated weather events can wreak havoc on global supply chains, from delayed shipments to factory closures.
Looking Back at Last Storm Season:
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Typhoon Rai (Odette) hit the Philippines in December 2021, leaving a trail of devastation across the Visayas and Mindanao regions. It caused over $1 billion in damage and left businesses grappling with port closures, disrupted transportation networks, and power outages. Key production sites experienced prolonged downtime, while shipment delays stretched on for weeks due to damaged infrastructure. This had ripple effects across the region, as supplies intended for global markets were significantly delayed.
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In September 2021, Typhoon Chanthu skirted Taiwan and caused extensive damage across parts of mainland China. It disrupted major electronics manufacturing plants, including those supplying components critical to the automotive and consumer electronics industries. Shipping lines were rerouted, factories shut down, and transport infrastructure slowed production for several weeks, causing backlogs that affected both regional and international markets.
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Typhoon In-Fa in July 2021 also stands out. It disrupted one of the busiest ports in the world—Shanghai, the cornerstone of China’s export-driven economy. The port had to close down, straining international shipping routes and delaying goods bound for Europe and the Americas.
These storms underline the critical need for businesses to be proactive, adaptable, and prepared for sudden shifts in their supply chains.
Key Challenges Storms Pose for Supply Chains
1. Port Closures and Shipping Delays: Typhoons frequently cause port shutdowns or limit operations due to unsafe conditions. As seen with Typhoon In-Fa, even a short-term closure of a major port can create a massive backlog, delaying shipments for weeks. Businesses reliant on just-in-time supply chains were particularly hard hit last year, with goods stuck en route, leading to increased costs and supply shortages.
2. Factory Closures and Production Delays: Severe storms can cause factories to close for extended periods, as power outages and flooding prevent operations from continuing. Typhoon Chanthu, for instance, temporarily shuttered factories in Taiwan and China, disrupting production for industries ranging from electronics to textiles. These delays led to bottlenecks in global supply chains, which rippled across markets and affected product availability.
3. Disrupted Transportation Networks: Flooded roads, damaged bridges, and landslides following typhoons often make overland transport impossible in affected regions. Businesses relying on quick delivery of goods, such as perishable items or components for assembly, may experience extensive delays or have to find costly alternative routes.
4. Inventory Shortages and Price Hikes: For companies caught off-guard, storms can lead to inventory shortages that impact both production schedules and sales. Disruptions in sourcing raw materials or components from affected regions often cause price hikes as demand outstrips supply. This was evident during last year’s typhoon season, when consumer goods, automotive parts, and even raw materials saw price fluctuations.
How Asia Agent Ltd. Can Help Your Business Stay Resilient
At Asia Agent Ltd, we understand that severe weather events are an unavoidable part of doing business in Asia. However, their impact can be significantly mitigated through strategic planning and proactive measures. We have been working closely with businesses to ensure they are prepared to weather the storm—literally and figuratively. Here’s how we can help:
1. Conduct a Thorough Risk Assessment of Your Supply Chain
We begin by conducting an in-depth analysis of your supply chain to identify potential weak points that may be vulnerable to storms. We pinpoint reliance on suppliers or infrastructure in storm-prone areas and help develop contingency plans for maintaining operations during a storm.
2. Supplier Diversification and Alternative Sourcing
One of the lessons from last season’s storms is the importance of diversifying suppliers and manufacturing bases. Relying heavily on a single supplier or region can expose your business to significant risk if that area is impacted. We help you explore alternative suppliers in more stable regions, ensuring your supply chain remains resilient, even during major weather events.
3. Real-Time Monitoring and On-the-Ground Support
When a storm hits, real-time data is critical for making quick decisions. Asia Agent provides real-time storm tracking and operational updates from affected regions. Our teams on the ground work closely with your suppliers, monitoring production and logistics to ensure any disruptions are communicated immediately. By having local insight, we can help you adapt quickly to shifting conditions.
4. Build Stronger Contracts and Backup Plans
We assist you in developing stronger contracts with your suppliers, including clauses for handling delays or disruptions caused by severe weather. Additionally, we help establish clear backup plans, including alternate shipping routes and warehousing solutions, to minimize the impact of sudden disruptions.
5. Proactive Inventory Management
We help you develop strategies for stockpiling critical inventory or sourcing backup materials before storm season begins. This ensures that you have the resources you need to continue production if your regular suppliers are temporarily disrupted.
6. Strengthen Communication Channels
Effective communication between your team, suppliers, and logistics partners is crucial during times of crisis. We assist in establishing clear communication protocols and channels to ensure everyone stays informed and can act quickly in the event of a storm.
Looking Ahead: Be Prepared for the Unexpected
The 2023 storm season was a reminder that weather events are unpredictable but not unmanageable. By learning from last year’s storms and investing in strategic planning, your business can stay resilient and avoid costly disruptions.
Don’t wait for the storm to hit—prepare now.
Partner with Asia Agent Ltd to ensure your supply chain is equipped to handle storm-related challenges. With our experience and on-the-ground support across Asia, we can help safeguard your operations, no matter what weather comes your way.
