Around $7.5 trillion of trade is concentrated in 50 major ports, with potential for major supply chain disruption
The dollar value of trade entering the world’s busiest ports is concentrated in 50 shipping destinations, from Rotterdam to Shanghai.
Analysis by Russell Group shows that 55%, or $7.5 trillion of global trade, is concentrated in these 50 ports.
An incident or blockage at a port has ripple effects that harm organisations, consumers and the wider global economy. Recent examples such as COVID-19 and Brexit, highlight this growing issue.
Russell’s analysis describes five global shipping port scenarios and connected risks, which can be modelled to analyse the exposure facing (re)insurers, international corporate entities and SMEs.
These five scenarios are:
- Integrated Circuit Boards (ICBs) - ICBs are the largest imported commodity into China ($46 billion).
- Los Angeles - with an annual export flow of $6 billion and an import flow of $222 billion, Los Angeles is one of the world’s largest and vital ports.
- Long Beach with an annual export flow of $77 billion and import flow of $264 billion is a crucial port for the US economy.
- Brexit logjam – Felixstowe and Southampton experienced severe disruption as the ports struggled to keep up with the COVID-19 induced backlog of trade entering and leaving the ports.
- Houston, Texas - if the port were destroyed by a hurricane, the knock-on effect on the US economy would be devastating for key energy companies such as ExxonMobil, as well as retail economy giants like Walmart.
It is hoped the methodology will help C-suite decision makers understand and know their business networks. Having access to data on a potential exposure at a port, company, operator and commodity level, will help a multinational organisation identify any potential vulnerabilities in their network.