Syndicate content

Climate Change

Shoe Molds and Scuba Divers: How Natural Disasters Affect Our Supply Chains

Thomas Farole's picture

Like the massive earthquake in Japan earlier this year, the floods in Thailand are again exposing the vulerabilities of fragmented global supply chains.

Last month, a team of economists from PREM’s International Trade Department encountered some flooding side-effects during a visit to the Indonesian production site for ECCO, a Danish company that manufactures footwear. In order to transfer production to the factory in Indonesia, the workers needed the specific shoe molds used in the Thai factory. But there was a problem: The Thai factory was under three meters of water.

These specialized molds manufactured in the Thai factory would have taken several weeks to manufacture, which would have further delayed production. So ECCO hired scuba divers to enter the Thai factory and recover the molds. They then shipped them via air to other factories around the region, including ECCO Indonesia.

Shoemakers are not the only businesses with drowned components. Automotive producers are also hiring divers to rescue molds from underwater Thai factories, according to the Financial Times. Honda, for one, has said it will cut worldwide production by 50 percent because of a shortage of specialty parts. Reuters reports that computer hard drive prices have

To Address Climate Change We Need to Measure Poverty Better

Otaviano Canuto's picture

Dry land in ChileIncreasing food and oil prices are making life miserable for millions of people. According to our World Bank estimates, the food price hike since last July has already pushed another 44 million people around the globe into extreme poverty –those living on less than US$1.25 a day.