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Operations & Capacity3 min read

Extreme Weather in Shipping: Seeing Which Counterparties Sit in the Path

Weather used to be the risk everyone accepted as background noise. It is now the risk that compounds with the others: the El Niño cycle constraining the Panama Canal is the same one raising typhoon and flood exposure across Asian ports, in a year when neither Suez nor Hormuz offers much slack.

Compounding is the whole story

A typhoon closing a South China port for two days is routine. The schedule absorbs it.

The same closure in a year when Hormuz is shut, the Red Sea is contested and the Panama Canal is rationing slots is not routine, because there is no slack anywhere in the network to absorb it. Vessels that would normally catch up cannot. Berth windows that would normally be rescheduled cannot. The delay propagates rather than dissipating.

Sea-Intelligence has estimated that around 5% of global deep-sea capacity — roughly 1.7 million TEU — has been tied up by delays, congestion and related factors, with only a little over half of container vessels running on schedule. In a system operating with that little margin, a weather event that would once have cost a day costs a week.

Where the credit damage lands

Idle vessels. A vessel waiting out a storm or a closed port earns nothing and costs the same. For an operator on thin voyage margins, a week of that is a cash flow event.

Spoiled and damaged cargo. Reefer cargo, agricultural products and temperature-sensitive goods degrade. The resulting claims sit between shipper, carrier, insurer and receiver, and nobody pays anything until they are resolved.

Disputed invoices. Weather is the most contested force majeure trigger in shipping, because the threshold between severe weather and foreseeable seasonal conditions is a matter of argument. Contested invoices age.

Inland cascade. Port closures back up into rail and road networks. Cargo that reaches the quay still cannot reach the customer, and the payment that depends on delivery stays outstanding.

Exposure is a map question

The practically useful question during a weather event is narrow: which counterparties have vessels or cargo in the affected area right now?

Most credit systems cannot answer it, because they hold counterparties as legal entities with registered addresses rather than as moving positions. A counterparty registered in Singapore may have nothing in the storm's path. One registered in Hamburg may have three vessels in it.

Answering the question requires vessel-level position data mapped to counterparty exposure. Once that exists, a weather event becomes a filter rather than a fire drill.

What CERTY does about this

Real-time exposure dashboards show which counterparties and vessels sit in a storm's path before a payment is already overdue. Because position data is tied to counterparty exposure rather than to registered domicile, a weather event can be filtered down to the specific book entries it actually touches.

FAQ

Frequently Asked Questions

  • How does extreme weather affect shipping credit risk?

    Through idled vessels earning no revenue, spoiled or damaged cargo generating contested claims, and delayed deliveries that stall the payments tied to them. In a network already operating with minimal schedule slack, these effects propagate rather than dissipating.

  • Why does El Niño affect both the Panama Canal and Asian ports?

    El Niño alters rainfall distribution across the Pacific basin, reducing precipitation in the Panama Canal watershed while increasing typhoon and flooding risk across parts of Asia. The same climate cycle produces both effects in the same season.

  • How can a credit team identify weather-exposed counterparties quickly?

    By mapping vessel positions to counterparty exposure rather than relying on registered address. Real-time position data filtered against an affected area identifies exposed counterparties within minutes.

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Portrait of Michel GrebenikofMG
Written by

Michel Grebenikof

Co-Founder & CEO

Michel brings two decades of global leadership across energy, industrials, and entrepreneurship to CERTY. Before co-founding CERTY, he served as Group Chief HR Officer and Group Head of Transformation at one of the world’s largest commodity producers and traders — a $12 billion revenue conglomerate — where he led organizational and strategic transformation across 45 countries and 28,000 employees. He previously co-founded Twistr and helped take it to become Europe’s second-ranked AI-based technology company, winning multiple international awards. An INSEAD MBA and Shell “Potential CEO” alumnus, Michel combines large-enterprise transformation experience with hands-on startup building — the same discipline now driving CERTY’s mission to bring real-time, data-driven credit intelligence to global maritime trade.

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