Global supply chains connect farms, factories, mines, ports, warehouses, and transportation networks across continents. Climate change is adding pressure to those systems as extreme heat, drought, floods, storms, and changing rainfall patterns affect both production and the movement of goods. A disruption in one location can quickly affect manufacturers, retailers, and consumers thousands of miles away because many businesses depend on closely coordinated suppliers and transportation routes.
The challenge goes beyond individual storms or droughts. Companies also have to manage supplier concentration, infrastructure exposure, water availability, worker safety, and the possibility that several problems will occur at the same time. Building resilience therefore begins with understanding where critical suppliers, production facilities, transport corridors, and ports are vulnerable and identifying practical alternatives before a disruption occurs.
Extreme Weather Can Disrupt Production and Commodity Supplies
Agriculture, manufacturing, mining, and processing all depend on environmental conditions that businesses cannot fully control. Drought can reduce crop yields and available water, flooding can close facilities, and extreme heat can raise operating costs or interfere with production. USDA projected Pakistan’s 2025/26 wheat crop at 27.5 million tons because of reduced planted area and extremely dry weather, with imports forecast to rise to 1.7 million tons as domestic production declined.
The effects can spread far beyond the region experiencing the weather event. During Uruguay’s 2023 drought—the country’s worst since 1947—the World Bank reported that more than 80% of the country was affected and agricultural yields fell by about 60%. A major loss of production can force international buyers to find new suppliers, accept higher prices, change specifications, or delay manufacturing while replacement materials are secured.
Businesses that rely heavily on climate-sensitive commodities should therefore know where those materials originate and how concentrated their sourcing has become. Monitoring drought, crop conditions, water availability, and production forecasts gives procurement teams more time to respond. Diversifying critical suppliers across different regions can also reduce the likelihood that one localized climate event will interrupt an entire supply network.
Ports and Transportation Networks Are Climate Chokepoints
Production may continue normally while goods become stranded because a road, railway, waterway, bridge, or port is disrupted. The Panama Canal demonstrated this vulnerability when an intense drought lowered water levels and interfered with navigation; the World Bank describes the canal as a critical global trade artery affected by a drastic decline in water availability. UNCTAD later reported that during the disruption, total Panama Canal transits fell 36% compared with a year earlier.
Ports are particularly important because they connect ocean shipping with road, rail, and inland distribution networks. UN Trade and Development reports that more than 80% of world trade by volume is carried by sea, making seaports critical nodes in international supply chains. At the same time, their coastal locations leave many exposed to sea-level rise, storm surge, extreme rainfall, waves, winds, and flooding.
Those risks are increasing as sea levels rise. UNCTAD cites observations showing a globally averaged mean sea-level rise of about 4 centimeters per decade and warns that higher sea levels can increase the frequency of damaging extreme coastal water levels. Businesses can respond by identifying alternative ports and transportation corridors, understanding which routes have no practical substitute, and working with logistics providers on contingency plans.
Extreme Heat Affects Workers and Operations
Climate risk also reaches supply chains through workers. Farm employees, construction crews, warehouse staff, port workers, truck drivers, and people working in factories without adequate cooling can all face greater physical strain as temperatures rise. Extreme heat can reduce safe working time while also increasing the energy required to cool production areas, warehouses, offices, and temperature-sensitive goods.
The International Labour Organization projects that heat stress could cause 2.2% of total working hours worldwide to be lost by 2030, equivalent to about 80 million full-time jobs, based on its modeling assumptions. The ILO notes that agriculture and construction are especially exposed because much of the work occurs outdoors, although heat can affect many other labor-intensive industries.
Companies can prepare by developing heat-management procedures before dangerous conditions arrive. Adjusted work schedules, access to drinking water and shade, better ventilation, cooling in enclosed workplaces, and monitoring of heat conditions can protect workers while reducing unexpected production interruptions. These measures should also be considered when evaluating important suppliers whose operations depend heavily on outdoor or high-temperature labor.
Build Resilience Through Diversification and Climate Information
Supply chains become more vulnerable when businesses depend heavily on one supplier, country, port, or transportation corridor. Diversification does not mean that every product should be produced locally or that companies should duplicate every supplier. In its 2025 Supply Chain Resilience Review, the OECD found that broad efforts to relocalize production could reduce global trade by more than 18% and global real GDP by more than 5% while failing to consistently improve resilience.
A more practical strategy is to understand critical dependencies and create alternatives where the consequences of failure would be greatest. The OECD emphasizes diversification, flexible supply networks, and better risk management rather than relying solely on domestic production. Companies can combine this approach with climate information to identify regions where weather or longer-term conditions could threaten suppliers and logistics.
Government climate information can help businesses plan earlier. NOAA’s Climate Prediction Center issues official 90-day temperature and precipitation outlooks once each month, alongside drought and other climate-monitoring products. Companies can combine those outlooks with supplier locations, inventory levels, transportation schedules, and production data to identify emerging vulnerabilities and prepare responses before conditions become emergencies.
Climate change does not mean that every supply-chain disruption can be predicted or avoided. It does mean businesses have more reason to understand where production, labor, infrastructure, transportation, and critical suppliers are exposed to climate hazards. Companies that diversify essential suppliers, identify alternative routes, strengthen exposed infrastructure, and incorporate reliable climate information into routine planning are better positioned to continue operating when disruptions occur.
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