Weather impacts on seaborne trade: a new model to explain port activity in the era of climate change

The significance of seaborne transport extends to local, national, and global economies, facilitating the transition from regional to global manufacturing networks. Nevertheless, trade activities are vulnerable to changing climate patterns. This research investigates the repercussions of extreme weather events induced by climate change on trade activities in 12 major ports, across 9 coastal states in India from January 2014 to March 2023. Employing panel data, we identify inverse relationships between weather variables, encompassing precipitation and relative humidity, and port traffic. In addition to weather variables, household income, air traffic, and the average net load of goods trains are used as explanatory variables of port traffic. The findings suggest that the escalation and frequence of extreme weather events can significantly impact the movement of goods and trade through ports. The detrimental impact of precipitation was particularly noticeable both on the eastern and western coasts of India, whereas relative humidity affected only the western coasts. The effect of wind speed, albeit statistically insignificant, was found to be negatively related to port flows on the eastern coast. India's status as a climate change hotspot increases the vulnerability of its ports. The methods and results presented here can inform policymakers in prioritizing training, updating insurance policies, upgrading infrastructure, and fostering stakeholder collaboration, along with the implementation of green solutions, to mitigate climate impacts.