As El Niño strengthens, so does the risk to supply chains.
This weather pattern, which occurs when surface waters in the central and eastern tropical Pacific become unusually warm, increases the risk of drought, flooding and other extreme weather around the world.
The NOAA reported earlier this week that there is a greater than 90% chance it becomes a very strong El Niño this fall and winter. This could add another layer of pressure to an already volatile freight market in the months ahead.
Flooding, drought and other disruptions can displace capacity across networks. If weather-related disruptions pull capacity out of key markets, they could contribute to tighter conditions and keep transportation costs elevated for longer.
In addition to preparing for storms in specific regions, logistics professionals should prepare for second- and third-order effects across their networks. Planning ahead will help keep freight moving—and limit exposure to cost premiums—when disruption in one market creates a domino effect across others.