Tsunami supply chain risk underestimated

Following two devastating earthquakes and tsunamis in Asia—the 2004 Indian Ocean tsunami and the 2011 Tohoku tsunami—scientists have radically changed their thinking about the peril. Before these events, tsunamis following earthquakes were thought to be very rare events, limited to a small number of so-called subduction zones where one tectonic plate slips under another. But according to a new study by catastrophe modelling firm RMS there are now thought to be more than 20 subduction zones worldwide capable of generating a giant earthquake and tsunami similar in scale to the 11 March, 2011, Tohoku, Japan event, which killed almost 16,000 people.hide“Future mega-tsunamis should no longer be considered black swan events, as we now know where these events can occur,” said Dr Robert Muir-Wood, Chief Research Officer at RMS. “While these events have very low occurrence rates, communities and businesses on the coastlines at frontline risk of these events should assess the risk accordingly,” he said. According to Dr Muir-Wood, the tsunami threat is currently underestimated. “Many people are completely unaware they live in direct range of a potentially catastrophic tsunami. As we saw four years ago with the Tohoku event, mega-tsunami events can devastate local communities and have far-reaching impacts on global supply chains,” he said. The RMS study reveals that many coastal populations, industrial clusters, ports and vacation resorts are at risk from tsunami, ranging from parts of Asia to Europe, the US and the Caribbean. Tsunami risk is perhaps greatest in Southeast Asia, mostly concentrated around the ‘Ring of Fire’ where the Pacific seafloor is slowly being subducted beneath the surrounding continental plates and island arcs, explained Dr Muir-Wood. “While tsunami risk is concentrated around the Pacific Ring of Fire one should not neglect the tsunami risk that also exists around the coasts of the eastern Mediterranean and in the eastern Caribbean,” said Dr Muir-Wood. A magnitude 9 earthquake on the Cyprus Arc could trigger a tsunami across the eastern Mediterranean Sea, impacting up to 12 countries including Cyprus, Israel, Lebanon and Turkey, said RMS. “Turkey would bear the brunt of impacts from a mega-tsunami generated on the Cyprus Arc. Coastal cities in Antalya, a popular tourist destination along the Turkish Riviera, and Mersin, a southern Turkish city with the largest seaport in the country, could experience tsunami wave heights up to nine metres,” said Dr Muir-Wood. The 2004 and 2011 Asian earthquakes and tsunami, together with such an occurrence off the coast of central Chile in 2010, claimed an estimated 300,000 lives and cost more than $250bn in economic loss. Exposures to tsunami are increasing, with rising populations and growing economic activity in coastal areas close to subduction zones. For example, an earthquake along the Manila Arc subduction zone could generate a giant tsunami, threatening populations, cities and supply chains in Southeast Asia. “The highest density of industry exposure is currently around the western US and Japan,” explained Dr Muir-Wood. “However, rapid economic growth in Southeast Asia and China and increasing exposure concentrations in coastal cities in that region make it another important region to pay attention to,” he said. According to a separate study from reinsurance broker Guy Carpenter, Hong Kong, Taiwan, Kota Kinabalu, Macau, Manila and Vietnam are all exposed to a tsunami generated by a magnitude 9.4 earthquake in the Manila trench. The Guy Carpenter study found the largest risks are in southwest Taiwan, in particular the Port of Kaohsiung, Taiwan’s principal port and the sixth largest container port in the world. While the Cyprus Arc is dormant, the Manila Trench has been building up enormous amounts of energy as the Philippine Sea plate and the Eurasian plate continue to push against one another, according to Guy Carpenter. “The Tohoku tsunami event of 2011 and the previous severe events in Chile in 2010 and the Indian Ocean in 2004 have proved that tsunami is a very real and potentially very severe peril with the capability to cause devastation over a broad area,” said Mike Owen, Head of Analytics for Asia Pacific at Guy Carpenter. “This is particularly the case for the Asia Pacific region where events triggered almost anywhere around the Pacific Rim can strike multiple countries,” he said. The 2004 Indian Ocean Tsunami and the 2011 Tohoku events were a wake-up call for scientists and governments, sparking renewed research and additional disaster preparedness in some affected regions. To prepare for potential future tsunamis, local government agencies in coastal communities have worked closely with scientific groups to develop tsunami emergency evacuation plans, according to Dr Muir-Wood. Several research projects have also been undertaken to understand the societal and business impacts of tsunami. These projects have looked into tourist and business preparedness, as well as warning systems and evacuation planning effectiveness, added Dr Muir-Wood. Society in general has taken on a more proactive role in building resilience into their coastal communities, and global businesses, especially after the 2011 Tohoku earthquake, started to do the same, he said. “Risk managers are now more sensitive to how tsunamis could impact their local or global supply chains, and how critical the performance of lifeline systems—like transportation networks and utilities—are to those supply chains,” said Dr Muir-Wood. “Risk managers are more recently starting to incorporate tsunami risk into their disaster recovery plans and to diversify suppliers, among other measures,” he said.

Tsunami supply chain risk underestimated

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