Australia's domestic freight task hit a record 786 billion tonne kilometres in 2024–25. The policies covering a large share of it were written before the Bureau of Meteorology declared a strong El Niño, and a specialist transport insurer is now urging operators to check whether the declared values on those policies still hold.
National Transport Insurance (NTI), which describes itself as Australia's largest specialist transport and logistics insurance provider, issued pre-summer guidance this week asking operators to confirm that declared values reflect current freight costs and stock values. It is the only item in that guidance that touches the policy itself.
Declared values are the figures an operator nominates for the goods and equipment a policy responds to. They are set at a point in time and they do not move on their own. When route closures push freight costs up, when drought alters agricultural output, or when delays change what goods are worth while they are in transit, a schedule written months earlier can be answering a question the business is no longer asking.
The exposure is not small. The Australian domestic freight task reached an estimated 786 billion tonne kilometres in 2024–25, its highest point on record, according to the Bureau of Infrastructure and Transport Research Economics. Rail carried approximately 447 billion tonne kilometres of that total and road approximately 253 billion.
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The claims environment against which those values are tested has moved sharply. The Insurance Council of Australia reported that extreme weather generated $4.8 billion in insured losses across Australia in 2025, up from $585 million in 2024. Insurers handled 294,000 claims from declared extreme weather events over the year, almost six times the prior year's volume, with average costs per claim rising 39 per cent to $16,471.
That average is the number that matters for a declared value set before a season rather than after one. Claim costs moved by almost 40 per cent in a single year. A schedule that was accurate when it was written is not automatically accurate twelve months later, and the gap only surfaces at claim time.
The Bureau of Meteorology declared El Niño underway on 16 June 2026. Most models classify the event as strong to very strong, with conditions forecast to persist well into the latter half of 2026. Events typically peak in summer before weakening in the first quarter of the following calendar year.
Since January 2026 it has been drier than average across north-eastern New South Wales into southern Queensland, according to the bureau. The bureau has also noted that warmer sea surface temperatures around Australia can enhance atmospheric moisture, increasing the potential for high-intensity rainfall in some regions. The risk profile is therefore geographically variable rather than uniformly dry.
Event strength is also a poor guide to local impact. CSIRO notes that the magnitude of an El Niño does not have a clear linear relationship with Australian impacts, and that many of the worst bushfire and drought events on record have occurred during relatively weak events.
NTI logistics risk engineer Chelsea Neely said the effects on supply chains are not always direct or obvious, and can move through agricultural output before they reach freight volumes.
"Extreme weather can also impact the types and volumes of goods being moved. For example, reduced rainfall may impact crop yields, while prolonged dry conditions can place pressure on livestock producers and influence the timing and volume of livestock movements," Neely said.
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She added: "Businesses might consider how these shifts could affect their own supply chains and be prepared for the ebbs and flows in freight demand that may come with changing seasonal conditions. Knowing your alternative routes, suppliers, and contacts before something happens can save valuable time when conditions change quickly."
Those shifts in what is carried, and how far, are the same shifts that unsettle a declared value. A schedule built around one commodity mix does not necessarily hold when the mix changes mid-season.
Neely said the period before summer is the window to revisit existing arrangements rather than wait for disruption to arrive.
"The Australian summer can be unpredictable, and the potential impact on a business depends on its location, operations, and individual circumstances. This isn't about assuming what disruption will occur, but more so about using the lead-up to summer to revisit existing plans, update emergency checklists and contacts, and make sure they are communicated and understood across the business, in case things suddenly change," she said.
Alongside the declared values check, NTI's pre-summer guidance asks operators to map alternative freight routes, review driver and workplace safety procedures for extreme heat, test emergency and business continuity plans, confirm emergency equipment is operational, and diversify suppliers against delay. The insurer has made severe weather resources available through its website, including a guide to developing a business continuity plan, a flood mitigation guide and a bushfire preparation checklist.
