This article is by Adrian Hall, US CEO, Swiss Re Corporate Solutions
Electronics, mechanical appliances, energy or industrial & manufacturing components move through global ports and airports every day. Over the past several years, real‑world events like the Covid pandemic, geopolitical crises or major explosions have shown that disruption at a single critical logistics node can ripple rapidly through regional and global supply chains. An earthquake striking a critical port area can be equally disruptive.
When earthquakes or other sudden infrastructure shocks strike ports or airports, physical damage is often compounded by delayed access to recovery funding, creating prolonged operational shutdowns and severe economic consequences.
These risks are no longer hypothetical. In February 2023, a series of powerful earthquakes in southern Turkey and northern Syria caused extensive damage to logistics infrastructure, including Iskenderun Port, a major Mediterranean container hub. Port operations were suspended following structural damage and fires, forcing shipping lines to reroute cargo and creating congestion at alternative ports such as Mersin. Airports, highways, and rail connections were also impacted, sharply reducing the region’s ability to move goods and raw materials for weeks to months after the event, further complicating rebuilding and recovery efforts.
Similarly, in April 2024, a magnitude 7.4 earthquake in Taiwan highlighted how seismic risk at key infrastructure nodes can threaten globally critical supply chains. While physical damage was uneven, the event raised immediate concerns about continuity at ports, airports, and advanced manufacturing facilities in one of the world’s most important semiconductor hubs. Even short‑lived disruptions sent ripple effects through electronics and automotive supply chains, reinforcing how concentrated and time‑sensitive modern logistics networks have become.
At the same time, the broader logistics environment has grown more fragile. In 2024, U.S. ports faced repeated operational disruptions from hurricanes, flooding, and infrastructure failures, including temporary port closures and landside transportation outages across the Southeast. These events demonstrated how quickly cargo backlogs can form when ports lose even partial operational capacity, and how costly rerouting and delay become once congestion spreads across regions.
Despite these stresses, ports and airports remain indispensable to the global economy. In the United States alone, hundreds of coastal and inland ports handle trillions of dollars in trade each year, and federal reviews have confirmed that many remain exposed to natural hazards, including earthquakes, floods, and hurricanes. While public funding and traditional insurance play an important role in long‑term recovery, these mechanisms rarely provide immediate post‑event liquidity needed to stabilize operations in the critical days and weeks following a disaster.
This is where parametric insurance continues to demonstrate clear value. Parametric earthquake solutions settle based on reported ground shaking or earthquake magnitude, rather than physical damage assessments. As a result, claims can be triggered and paid rapidly once authoritative data—such as that published by the United States Geological Survey (USGS)—is available. This approach allows port authorities, airport operators, and corporates with contingent business interruption exposure to access funds quickly, supporting emergency repairs, alternative routing, labor retention, and inflation‑driven cost spikes.
Recent disaster responses across the insurance market have shown that parametric claims can be communicated and settled within days to weeks rather than months to years, providing a critical liquidity bridge while traditional claims, government assistance, and reconstruction planning proceed. In an environment where supply chains are already strained by climate volatility, geopolitical risk, and labor disruptions, this speed has become increasingly valuable.
While recent earthquakes in Turkey, Taiwan, and elsewhere underscore the global nature of seismic supply‑chain risk, the U.S. West Coast represents one of the most consequential—and underappreciated—earthquake exposure zones for global trade. The ports of Los Angeles, Long Beach, Oakland, Seattle, Tacoma, and Portland, along with major cargo airports across California, Oregon, and Washington, collectively handle a substantial share of U.S. containerized imports and exports, particularly for consumer goods, energy inputs, agricultural products, and advanced manufacturing supply chains.
These ports sit astride two major seismic systems: the San Andreas Fault system in California and the Cascadia Subduction Zone, which stretches from Northern California through Oregon, Washington, and into British Columbia. A large earthquake on either system would be expected to cause strong ground shaking across wide geographic areas, increasing the likelihood of simultaneous impacts to multiple ports, intermodal yards, highways, rail corridors, and utilities. Unlike more localized hazards, such events raise the risk of regional logistics paralysis rather than isolated facility loss.
Recent non‑seismic disruptions have already illustrated how sensitive West Coast logistics are to short‑duration shutdowns. Temporary closures, labor disruptions, and weather‑related interruptions over the past several years have shown that even brief operational halts at Los Angeles/Long Beach or Pacific Northwest ports can rapidly lead to vessel queues, inland congestion, equipment shortages, and cascading delays across North American distribution networks. A major earthquake would compound these effects by introducing physical damage, safety inspections, and uncertain reopening timelines, all at once.
From a geotechnical perspective, many West Coast ports are built on soft soils, reclaimed land, or waterfront fill, which are more susceptible to amplified shaking and liquefaction during strong earthquakes. Damage to wharves, cranes, container yards, fuel systems, and power supply does not need to be total to be economically severe; partial loss of operability can be enough to disrupt cargo flow for weeks or months, particularly when combined with aftershocks and constrained repair capacity.
For corporates that rely on West Coast gateways – whether retailers importing consumer goods, manufacturers dependent on components from Asia, or exporters of agricultural and industrial products – the exposure is not limited to physical loss. Contingent business interruption, rerouting costs, contractual penalties, and post‑event inflation can materially impact earnings even if the company’s own facilities are undamaged. Traditional insurance and public funding mechanisms, while essential, are unlikely to deliver capital on the timeline required to stabilize operations and supply commitments in the immediate aftermath.
In this context, parametric earthquake insurance is especially well suited to the U.S. West Coast risk profile. Because policies are triggered by measured ground shaking rather than assessed damage, they can provide rapid, transparent liquidity following a major Cascadia or California earthquake – precisely when port authorities, airport operators, and dependent corporates face the highest cash demands. Early access to funds can support emergency inspections, temporary repairs, labor retention, alternative routing, and working‑capital needs while longer‑term recovery efforts proceed.
As North American supply chains continue to rebalance and cargo volumes remain concentrated at a limited number of high‑capacity gateways, the financial resilience of West Coast ports and airports has become a systemic economic issue. The events of the past several years have shown that supply‑chain fragility is no longer theoretical. A future major West Coast earthquake would test not only infrastructure design, but also the ability of operators and corporates to access capital quickly enough to prevent a regional disruption from becoming a national – or global – economic shock.
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