A strong El Niño is underway, with the Bureau of Meteorology expecting further intensification through spring. While that doesn’t necessarily mean severe impacts everywhere, El Niño has historically brought drier conditions during winter and spring across parts of Australia.
For operators, changing conditions can contribute to shipping delays, higher freight rates, heat damage to roads and rail, and increased fire and drought risk. NTI Risk Engineers, Chelsea Neely and Paul Bressan, suggest knowing what your site is exposed to, keeping the plan current, and practising your response.
Here's what they say businesses might consider as El Niño is expected to intensify.
Key takeaways
Know what your site is exposed to and start planning for flood, fire, cyclone or heat.
Risk depends on where you are. Cyclone country in North Queensland needs a different plan from a depot in the bush.
People come before trucks and stock. If you’ve got that in writing, decisions are clear when the pressure is on.
Update the plan whenever the business changes. A new site, a new road, new staff or new cargo can all render a plan outdated.
Practise your response. Run a drill so you can test your plan before you need it.
Order earlier. Businesses should anticipate delivery delays.
What El Niño could mean for transport and cargo in 2026
Every event differs, but the last moderate to strong El Niño ran from spring 2023 into early 2024 and coincided with Australia’s driest three-month period on record.
At sea: Delays through the Panama Canal, and higher freight costs
Logistics Risk Engineer Chelsea’s immediate concern is the Panama Canal. She notes it has already reduced vessel transits, with draft restrictions expected from the start of September.
“Last time, vessels were delayed up to three weeks through the Panama Canal,” Chelsea says. “If the Panama Canal is impacted again, there is a significant risk of substantial vessel delays, with potential flow-on impacts across global supply chains .”
Late goods are only part of the cost. Freight rates also rise as space runs short, and if this lands in peak season, shipping lines have pre-Christmas surcharges.
Rerouted cargo is handled more often, raising the risk of damage
“If they have to find alternative routes, that introduces different handling points,” Chelsea says. “That cargo might be handled an extra two or three times more than it would have been.”
On top of this, if freight costs, duties or stock values have gone up but your insured amount hasn't, your cargo insurance limit may no longer match the value you're moving.
On the road: Heat damage and late deliveries
Delays don't stop at the wharf. Road operators are measured on DIFOT (delivered in full, on time) and as Heavy Motor Risk Engineer Paul points out, a missed slot can cost more than just time.
“If they miss that loading dock deadline, they could be turned away,” he says. “And then they've got to unload that trailer again, or let it sit in the yard for a day.”
Heat and dry weather also damage the network; rail can buckle, roads can crack, and regional roadsides can erode. Remote sites also wait longer for repair crews than metropolitan areas.
Three ways to prepare for El Niño
1. Assess what your site is exposed to
Paul's first step is “identifying your level of risk when it comes to environmental conditions”, using local councils, flood mapping and SES services, then working backwards from that to design the response.
For example:
Cyclones affect North Queensland and northern WA, including harvesting and getting product to port.
Bushfires are a serious concern for depots with one way in and out.
Drought reaches farms first, through smaller crops and less feed.
And as Paul notes, 12 months without rain doesn't rule out a downpour heavy enough to flood.
2. Ensure your business continuity plan matches how you operate
A business continuity plan (BCP) tends to be, in Paul’s words, “a bit of an out-of-sight, out-of-mind type of thing”. He says it’s often confused with the evacuation plan required for occupying a building, but the two serve different purposes.
An evacuation plan is focused on getting people to safety during an emergency. A BCP looks more broadly at how the business will respond, maintain critical operations where possible and recover afterwards.
Review annually, or when something changes
Paul’s rule is annually at minimum, or whenever a system, process or policy changes. “Maybe they put in a roundabout near their depot — that’s going to change the landscape.”
Conduct drills to test your response
A drill can show whether the plan works before it’s needed.
Chelsea recalls running annual drills in a previous role in Newcastle, where ammonium nitrate was imported, helping bring relevant stakeholders into the response planning process.
“It’s not just for your plan; it’s engaging those key stakeholders too,” she says.
3. Do the quick, low-cost jobs now
Start with the cheap and easy jobs. Fill the water tanks, bring stock in early, diversify suppliers, move priority equipment to higher ground and check the basics still work.
“We’re talking about simple things, like whether your fire extinguishers are all in-date,” Chelsea says. “There’s nothing worse than reaching for a bit of equipment and it not being what you expected.”
“However a BCP is developed, the main priority is making sure people are aware that preservation of life is number one, over equipment and assets,” Paul adds.
How our Risk Engineers help before, during and after an event
Our Risk Engineering team works with customers of all sizes at no additional cost to policyholders.
Before an event, that includes risk assessments and reviews of your emergency response and business continuity arrangements. During and after an event, they help you make safe decisions on moving vehicles, looking after staff and getting back on site.
Customers who engaged our Risk Engineers have seen a 73% reduction in off-road days and 45% fewer claims.*
For brokers: What to ask your clients now
Weather-related risks won’t always come up naturally when a policy is being renewed, so it can be worth prompting clients to think about how changing conditions could affect their operations.
Paul sees this as an important conversation for brokers to have with their clients: identifying “those environmental conditions that we don’t see all the time, but are still a risk”.
Questions worth putting to your clients:
When was the business continuity plan last reviewed or tested?
Has anything changed on or around the site? Any new roads, buildings, drainage or other infrastructure?
Do they monitor conditions themselves, or wait to be told?
Are declared values and policy limits still in line with current freight costs and stock values?
Your plan should be ready for El Niño or no El Niño
A weather event doesn't need to be imminent to be worth preparing for. Know what your site is exposed to and keep a plan that works for the business as it operates today. Then practise it, so the gaps are exposed in a drill.
If you do one thing this week, check whether your BCP still describes your site, your people and your routes.
NTI customer? Contact your broker to find out more.
Broker? Contact your NTI representative to discuss Risk Engineering support for your clients.
Find our business continuity, flood mitigation and bushfire preparedness guides over on our Severe Weather page.
*Source: Risk Engineering Engagement Outcomes Report prepared by NTI.
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