What will the 2022 heat waves cost businesses
Between 1980 and 2000, heat waves in Europe cost up to $71 billion. Today, in addition to the COVID and the Ukrainian crises, this year’s high temperatures could bear more obstacles on every business’ path. Each industry is impacted: agriculture, construction, transport, manufacturing, etc.
What are the aspects that affect the growth of SMBs?
Impact on delivery
With the price of fuel going up, the container’s price is also rocketing. The cost for transport (trucks, trains, ships, planes) takes a toll on small businesses. In addition, heat waves increase the risks of accidents related to high temperatures: distortion of the asphalt, roads and railroads, which leads to traffic lanes getting closed, delivery cancellations or delays. A longer time in economic value.
Impact on inventory
Warehouses are more likely to reach high temperatures or even catch fire. Your inventory is highly exposed to quality damages. Food products, as well as medicine, are all perishable goods: short best-before dates, maintenance of the cold chain or defined temperatures, heat-sensitive wrappings, etc. Other products such as gas bottles, fire extinguishers or aerosols are extremely flammable due to the pressure contained in them. Much as electronic components (batteries), flammable liquids and chemicals, they must be kept carefully stored under close surveillance at all times. Derivative products from organic matter like rubber, plastic or paint deteriorate very quickly if stored under high temperatures. Lost inventory are forever lost sales, lost clients, wasted money, tarnished reputation and potentially lawsuits in the event of a prejudice.
Impact on supplier
Some products are rare: whether they are auto spare parts or materials for the construction of new buildings, your suppliers are no longer able to ensure the production of certain products because of the rise of prices on raw materials and heat waves that affect productivity. It becomes impossible to know exactly when you will receive your merchandise.
Impact on human productivity
According to the ILO (International Labor Organization), “above 33-34°C, a worker loses 50% of her or his work capacity.” All workers are affected, especially in the sectors of agriculture, natural resource management, construction, forestry, and transports. Consumers also tend to buy less clothing and food, in times of continuing high prices. On the other hand, the WHO (World Health Organization) observed a decrease of dynamism and focus in employees. Fatigue from warm nights and longer breaks have an impact on the operation of a business. 15°C all year long would be the optimum temperature for an ideal productivity. Failing this, experts call it “thermal inertia” which disturbs human activity.
Impact on human health
Inevitably, both mental and physical health of people is threatened by heat waves: fatigue, decrease of cognitive capacities, accidents, sick leaves, deaths… The cost of heat waves is estimated to €814 per each person affected.
What are the solutions?
Keep up with the weather forecast, 70% of businesses worldwide are weather-sensitive! You can start by setting up the AC in the office. Besides, the US government launched a website defining recommendations and measures to help citizens prepare and preserve their health during extreme heat. Joe Biden announced that $2.3 billion would be allocated to help people withstand severe heats, fires, storms and floods caused by global warming.
Store your sensitive products in a dedicated cold storage space (underground). Do not forget to build up a safety stock and track your products in your warehouse(s): a good inventory management app such as Erplain offers, among others, these automated features.
Adjust working conditions
In outdoor hard working sectors such as agriculture, forestry or construction, a useful solution is to rearrange working hours to the coolest periods of the day. That way you keep your employees’ health and productivity preserved. Besides, reducing working hours for your employees is a far better solution than having to deal with sick leaves.
According to the ILO, this climate stress will have an even bigger cost on global economy in 2030, with 2.2% of working hours lost due to thermal stress. What’s more, the average temperatures on Earth will also increase by 1.5°C (at the lowest). Regularly keeping up with the news added to a good business management are indispensable to prepare for heat waves.