Super Typhoon Chanthu likely to exacerbate ongoing supply chain bottlenecks in China and Taiwan

Super Typhoon Chanthu likely to exacerbate ongoing supply chain bottlenecks in China and Taiwan

Abstract

Tropical depression Chanthu, formed off the coast of Guam, has rapidly gained strength in less than 48 hours as a category five super typhoon on the Saffir-Simpson scale. With wind speeds of up to 259 km/h, the storm is expected to cause significant infrastructure damages and will force closures of major ports and airports in eastern China and Taiwan. Chanthu is expected to further aggravate the supply chain bottlenecks in Asia.

Tropical storm Chanthu, which formed off the coast of Guam on September 7, rapidly intensified into a Category 5 super typhoon on the Saffir-Simpson scale on September 8 and have since reduced in intensity to a Category 4 storm. At the time of writing, Chanthu had wind speeds of up to 259 km/h, which could accelerate in the coming days. As of September 9, the weather system is located around 885 km southeast of Taiwan and is forecast to continue moving north-westerly. It will come closest to Taiwan on September 11-12 and is expected to head to China’s eastern coast by September 14-15.

While it is early to forecast whether Typhoon Chanthu will make landfall in China, Everstream Analytics’ in-house Applied Meteorology team indicates that all of Taiwan, the coastal areas of China in Zhejiang, and a small portion of Fujian province are likely to be impacted by the typhoon. Although the trajectory and intensity of the storm may change on short notice, heavy rains, strong and damaging winds, rough seas, and storm surges can be expected. This may cause significant disruptions at ports and airports along the storm’s path in Taiwan and coastal areas of China.  

Figure 1: Typhoon Chanthu’s forecasted path in the western Pacific Ocean. Source: Everstream Analytics

Transport hubs and critical infrastructure at risk

Intelligence received by Everstream Analytics indicates a high risk of port closures at Kaohsiung and Taichung. The Port of Kaohsiung, Taiwan’s largest port that handles various bulk cargo for export and import particularly for the petrochemical industry, often bears the brunt of storm impacts before it continues to China or Japan due to its strategic location in the Pacific Ocean. Based on Everstream Analytics’ data from previous typhoons, Port of Kaohsiung closes for 2 days on average during a storm’s passing.

In southern China, ports in the cities of Fuzhou, Dongshan, Putian, Ningbo, Quanzhou, Shantou, Shanghai, Xiamen, Zhoushan, and Zhangzhou could also face intermittent closures. Similarly, flight cancellations and airport closures can be expected at Kaohsiung International Airport, Changle International Airport, Gaoqi International Airport, and Jinjiang International Airport. Typhoon In-Fa, which had a similar trajectory and strength to Typhoon Chanthu, forced closure of several major ports, including the Port of Shanghai and Port of Ningbo, for three days when it made landfall in late July. In-Fa also forced hundreds of flights and train services to cancel and caused severe flooding. Similar disruption can be expected on critical roads and rail infrastructures as Chanthu tracks the same path.  

The storm’s severity is highly likely to cause intermittent disruptions to critical infrastructure such as network, electricity, and water supplies. Hurricane Ida in the Atlantic basin recently, with a similar storm strength as Chanthu, had caused widespread power outages for a million customers in Louisiana and Missouri in the United States when it made landfall on August 29. As of September 8, half a million customers are still without power, prompting many chemical manufacturing companies to continue experiencing production halts.

Typhoon may exacerbate ongoing supply chain disruptions in China

Typhoon Chanthu will only exacerbate the ongoing cargo congestions in China. The typhoon’s path is currently forecasted to track towards China’s eastern coastal areas with direct threat to the Port of Ningbo-Zhoushan. The port is still grappling with congestion due to the two-week closure in August after a single COVID-19 case was detected amongst its workforce. Partial operations at the port only resumed at the end of August, with the current vessel waiting times at Ningbo’s Beilun International Container Terminals standing at around 1.5 days. Severe winds associated with the typhoon may further extend berthing times.

Similarly, airfreight operations has also been affected at Shanghai Pudong International Airport (PVG) due to COVID-19 outbreak among cargo handlers. The airport, which handles more than 3.1 million tons of cargo annually, was forced to close for several weeks. Delays are expected to last well into the end of September. The approaching typhoon may compound complications to the thriving manufacturing sector in Shanghai that relies on PVG for outbound shipments. Healthcare, information technology, automobile, and chemical companies may face supply & material shortages in the coming weeks due to logistics delays if alternative arrangements are not secured in advance. Frequent COVID-19 outbreaks and subsequent closure of logistics facilities have created supply chain bottlenecks in China already, and neighboring ports and airports of the affected locations have had to process extra cargo.

In preparation for Typhoon Chanthu, Everstream Analytics customers with businesses in Taiwan and southeastern China are advised to monitor updates on adverse weather conditions from our in-house Applied Meteorology team and proactively make contingency plans. Customers are also advised to use Intelligence Monitoring capabilities to monitor developing situations, conduct impact assessments, and engage supply chain partners on alternative arrangements.

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