TT Club: prepare now for a Super El Niño

Global transport and logistics insurer TT Club is calling on supply chain operators worldwide to review their risk management and resilience strategies considering growing forecasts of a "super" El Niño event – one that could represent a significant systemic shock to already strained global supply chains.

With the world now officially in an El Niño climate pattern, the latest forecasts indicate a high probability that the current phase could intensify into one of the strongest on record. The European Commission's Joint Research Centre has described the outlook as "potentially historic", warning of widespread and simultaneous climatic disruption across multiple regions.

TT Club is urging organisations to recognise that a super El Niño is not simply a weather event, but a systemic risk multiplier that has the potential to compound existing vulnerabilities across global supply chains.

The convergence of climate disruption with ongoing geopolitical pressures creates conditions for cascading, interconnected challenges across transport networks, energy systems and commodity markets, TT Club said.

Key areas of concern identified by TT Club include:

• Transport and logistics disruption – Reduced water levels in critical transit routes such as the Panama Canal, alongside intensified Pacific storm activity, could further erode the reliability of global shipping networks.

• Energy and industrial impacts – Extreme heat may drive surges in energy demand with potential compounding affects to power generation and supply, potentially leading to power rationing and operational disruption in - manufacturing hubs.

• Second and third-order effects – Organisations may face indirect impacts through supplier disruption, freight cost increases, energy market volatility - and working-capital pressures.

Neil Dalus, risk assessment manager at TT Club commented: "The trajectory of this El Niño event demands that the logistics and supply chain community takes a proactive rather than reactive approach. The question is not whether disruption will occur, but how prepared organisations are to anticipate and respond to it. Those with greater supply chain visibility, diversified sourcing strategies and robust crisis management frameworks will be far better positioned to weather what could be a very challenging period."

TT Club is encouraging organisations to take priority actions, including enhanced scenario planning that incorporates compound climate and geopolitical risks, supply chain diversification away from highly exposed geographies, deeper supplier mapping to identify hidden vulnerabilities, and the integration of seasonal climate intelligence into decision-making processes.

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