Ports in Japan, China and the U.S. face the greatest financial risk from natural disasters because of their vulnerable locations and increasing cargo volumes, a risk-management firm said.
Nagoya, Japan, leads all ports with a potential $2.3 billion cost to insurers from a one-in-500-year event because of the threat from earthquakes and windstorms, RMS Inc., a risk-modeling firm, said Monday in a statement. Guangzhou, China, is second at $2 billion, the company said, citing the possibility of wind-related losses and the dangers involving petroleum products and autos. RMS said satellite images and analysis of cargo types and storage methods helped modernize risk assessments.
“Outdated techniques and incomplete data have obscured many high-risk locations,” Chris Folkman, director of product management at RMS, said in the statement. “The industry needs to cease its guessing game when determining catastrophe risk and port accumulations.”
The report was released a year after the Tianjin port explosion in China, a man-made disaster that led to more than $3 billion in claims after damaging property, disrupting supply chains and killing more than 170 people. RMS’s analysis, which also considers the amount of time cargo stays in port, found that the increased use of standardized shipping containers increased the amount of goods exposed to damage. Ships and ports have grown bigger to accommodate the containers.
Takahiro Ono, risk management supervisor at Nagoya Port Authority, said planning for possible catastrophes is a priority.
“We’ve been preparing for emergencies and disaster on a daily basis to ensure a safe and secure port,” he said.
U.S. ports at the Gulf of Mexico held six of the top 10 spots, led by Plaquemines and New Orleans in Louisiana, because of their exposure to hurricanes. The country’s other locations on the list are Pascagoula, Mississippi; Beaumont, Texas; Baton Rouge, Louisiana; and Houston.
Port of New Orleans President Gary LaGrange said that the facility was able to resume cargo operations 12 days after the landfall of Katrina in 2005 and has benefited from a risk-reduction system after that storm. Pumping stations, canal-closure structures and gated outlets all helped preparedness, he said.
“We believe the Port of New Orleans illustrated remarkable resiliency 11 years ago and today is better prepared than in any time in its history,” LaGrange said.
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