Fresh water is a hidden challenge − and opportunity − for global supply chains
Retrieved on:
Wednesday, November 8, 2023
Reports of lengthy shipping delays for vessels traveling through the Panama Canal this year have highlighted the critical but often overlooked role that fresh water plays across global supply chains.
Key Points:
- Reports of lengthy shipping delays for vessels traveling through the Panama Canal this year have highlighted the critical but often overlooked role that fresh water plays across global supply chains.
- Drier than normal conditions in Panama, brought on by El Niño, have left the region drought-stricken and water levels in the locks that feed the canal lower than normal.
- As a professor of supply chain management, I think businesses would be wise to pay closer attention to this issue.
Water, water everywhere, and not enough to share
- Each crossing by a ship requires 52 million gallons of fresh water from lakes, rivers and streams across this small country.
- This creates a trade-off between preserving water for local needs and using it to allow ships to traverse the canal.
- Periodic low water levels in the Mississippi River and the Rhine River in Germany have impeded barge traffic for years, disrupting supply chains while stoking debate about how to divide limited amounts of fresh water.
An ancient challenge
- The need to manage water resources isn’t new, with complex water management systems dating back to the Roman Empire and even earlier.
- As my colleagues and I show in a recent journal article, water is an important component of almost everything people buy.
- A lack of water can hamper production and disrupt the supply chains that businesses rely on.
Solutions for businesses
- There are a number of ways in which businesses can improve their water management to reduce their own consumption – and costs – while limiting their exposure to water risks.
- Similarly, not every process pollutes water, so reuse is easy for wastewater resulting from those processes, such as water used for cooling.
- While stronger government regulations and expanded reporting requirements will help, decisions by businesses themselves can move that needle even more.
Dustin Cole does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.