Australian transport and logistics operators are being urged to review their insurance cover and business continuity plans before summer, as a confirmed and strengthening El Niño raises the prospect of route disruptions, shifting freight demand, and supply chain volatility across the country.
National Transport Insurance (NTI), which describes itself as Australia’s largest specialist transport and logistics insurance provider, issued the guidance this week – with a specific call for operators to check that declared values on their policies reflect current freight costs and stock values.
NTI logistics risk engineer Chelsea Neely said the lead-up to summer is the time to revisit existing plans, not 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,” Neely said.
Neely said El Niño’s effects on supply chains are not always direct or obvious – they can move through agricultural outputs and freight demand in ways that take time to materialise. “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,” she said.
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.”
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The Bureau of Meteorology (BoM) declared El Niño underway on June 16, 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, as well as parts of southern Victoria and Western Australia. The BoM has also noted that warmer sea surface temperatures around Australia can enhance atmospheric moisture, increasing potential for high-intensity rainfall in some regions – meaning risk is not uniformly drought but geographically variable and hard to predict in advance.
CSIRO has confirmed the El Niño is expected to persist into the summer months of 2026-27 and notes that event strength does not have a clear linear relationship with Australian impacts. Many of the worst bushfire and drought events on record, CSIRO says, have occurred during relatively weak El Niño years.
NTI’s call to review declared values is the most directly policy-relevant part of its guidance – and the one with the clearest implications for brokers.
Declared values in transport policies are set at a point in time. When route disruptions push freight costs up, when agricultural outputs shift due to drought, or when supply chain delays alter what goods are worth in transit, a policy written months earlier may no longer adequately cover what is actually moving.
Australia’s domestic freight task reached a record 786 billion tonne kilometres in 2024-25, according to the Bureau of Infrastructure and Transport Research Economics (BITRE), with NSW road freight alone at 87.6 billion tonne kilometres. Infrastructure Australia’s analysis of National Freight Data Hub data confirms that unplanned closures on the National Land Transport Network (NLTN) due to fire or flood are directly tied to the severity of each year’s extreme weather season – adding to the risk that declared values, set before a disruptive season, fall short at claim time.
The market backdrop gives the guidance added weight. The Insurance Council of Australia (ICA) reported that insured losses from extreme weather events reached $4.8 billion in 2025, up from $585 million in 2024, with 294,000 claims from declared events and average costs per claim rising 39% to $16,471.
The Australian Prudential Regulation Authority’s (APRA) quarterly general insurance performance statistics for the December 2025 quarter show short-tail property classes – which include commercial motor and transport-related lines – posted a loss of $707 million, following positive results earlier in the year.
Despite a broadly softening market in the first half of 2026, according to Marsh’s mid-year market update, transport remains a class under pressure. Clients who treat a softer headline market as a reason to defer coverage reviews may be drawing the wrong conclusion from the aggregate.
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NTI has outlined a practical pre-summer checklist for operators:
NTI’s free severe weather resources – including a Guide to Developing a Business Continuity Plan, a Flood Mitigation Guide, and a Preparing for a Bushfire Checklist – are available via its website.
