On January 12, the Taal Volcano on Luzon Island in the Philippines erupted for the first time in 43 years, disrupting aviation, ground transport, and port operations in the surrounding regions for several days. Located within the so-called “Pacific Ring of Fire”, the Philippines are prone to natural disasters and are often faced with earthquakes, volcanic eruptions, and typhoons that put human life and the country’s infrastructure at risk. According to the Asian Development Bank, natural disasters resulted in socio economic losses of approximately USD 20 billion (EUR 18.15 billion) across the Philippines between 2000 and 2016.
On January 26, the Philippine Institute of Volcanology and Seismology (PHIVOLCS) lowered the alert level to 3, signifying a “decreased tendency towards hazardous explosive eruption”. The safety exclusion zone was reduced to 7km, allowing the majority of residents to return home. However, while the risk of an imminent, large-scale eruption has been downgraded, scientists emphasized that the danger of a large-scale second eruption is expected to persist for several months or more as volcanic conditions under Taal remain unstable.
As such, supply chain managers are advised to act now to ensure that they understand the risks to their production and transportation networks in the area, and have appropriate contingency plans in place to mitigate them before they manifest as disruptive events again.
Taal volcano signals disruptive potential in January
The volcano’s first phreatic eruption was recorded at around 13:00 local time on January 12, leading the PHIVOLCS to escalate the incident to a Level 4 alert within hours. This alert status signifies cases of imminent hazardous eruption, usually characterized by intensifying earthquake swarms, volcanic tremors, and strong ash explosions. Taal’s ash cloud subsequently travelled through Calabarzon and as far as Metropolitan Manila (40 miles; 65 kilometers north), Central Luzon, and Pangasinan, where it impacted all modes of transport.
Flight operations were particularly affected as the Ninoy Aquino International Airport in Manila, the county’s busiest airport, shut down air traffic from 18:00 on January 12 to 12:00 on January 13. Delays and cancellations continued to be reported throughout January 14. Overall, more than 500 inbound and outbound flights were affected before operations fully normalized. While Clark International Airport in Pampanga remained operational during this period, flights to and from the airport were also canceled or delayed due to the eruption.
Life in the 14-kilometer safety zone came to a standstill after the area experienced wide ranging power cuts and mandatory evacuations, forcing tens of thousands of people to leave the area and effectively ceasing all economic activity. More than a dozen municipalities in Laguna, Batangas and Cavite were also affected by the power cuts. These highly urbanized municipalities have established themselves as part of the country’s main industrial belt, making the Calabarzon region in which they are located the second-largest contributing region to national GDP. While Laguna houses the highest concentration of automotive assemblers, Cavite and Batangas house a range of organizations from the high-tech and electronics sectors. Companies reliant on overground transmission cables were particularly affected by power cuts following the eruption, while others were unable to use their machines due to heavy ash fall on their premises. According to a government representative, most organizations in the region resumed operations two days after the initial eruption on January 12.
The eruption also partially suspended vessel traffic in the area as the Port of Calaca advised all vessels to stay at anchorage between 01:34 on January 13 and 12:00 on January 14, effectively halting operations at the port in the aftermath of the eruption.
Mitigating supply chain risks from the Taal volcano
Supply chain managers with production or transportation operations on Luzon Island should continue to anticipate the potential for temporary infrastructural disruptions due to ash fall should the volcano erupt again.
In the immediate surroundings, an explosive eruption can result in catastrophic surges of high-velocity ash, gas, and tsunami activity. Further away on the island of Luzon, production, ground transportation, and port operations could face temporary disruptions of varying degrees depending on the severity of the ash fall. Additionally, ash fall has the capacity to damage electronic infrastructure, compromise water supplies, and disrupt agricultural production.
The sector with the greatest sensitivity to volcanic activity is aviation, which must take exceptional precautions due to the danger that volcanic ash cloud poses to jet engines. Region-wide disruption risk has reduced slightly since 2010, when the Eyjafjallajökull eruption in Europe caused a total stoppage of aviation operations in part due to the lack of flight safety guidelines for atmospheric concentration of volcanic ash, which have since been established. In the event of significant ash release, aviation disruptions on Luzon Island are likely; disruptions further away are also possible. Logistics managers with air freight moving through Luzon should ensure that they have contingency plans in place for scenarios in which Ninoy Aquino International Airport, Clark International Airport, or both are again disrupted by volcanic ash release, such as an emergency intermodal solution to redirect cargo to Mactan-Cebu International Airport.
The abrupt nature of volcanic activity emphasizes the benefits of diversifying one’s supplier base and implementing dual-sourcing strategies for key components. This could help to avoid supply shortages and production downtime should the main supplier be unable to deliver due to prolonged enforced evacuations, as seen in Batangas following the eruption on January 12. As part of a long-term strategic sourcing risk assessment, organizations can also evaluate which suppliers are located in risk-prone locations based on their probability of exposure to a volcanic eruption over time, identifying potential bottlenecks before they become disruptive.
In light of these risks, supply chain managers are advised to proactively and continuously assess the preparedness of key suppliers and transportation operators, and monitor Resilience360 for early warning signs of increasing volcanic activity. This can assist with the implementation of site-specific mitigation measures, reduce crisis response times, and avoid costly delays.