Recent heatwaves across Europe underline a growing reality for global supply chains: cargo risk is no longer limited to storms, floods or long-distance shipping routes. Rising temperatures, more frequent extreme weather events and increasingly volatile weather patterns are creating new vulnerabilities for goods in transit and temporary storage. For large enterprises, climate-related cargo losses can increase logistics costs, disrupt operations and threaten business continuity.
Climate change is increasing both the frequency and severity of weather-related disruptions, placing growing pressure on global supply chains. As a result, climate-related cargo risks are no longer limited to isolated damage events. They can also lead to delays, cargo accumulation, production interruptions and a higher total cost of risk.
Higher baseline temperatures are increasing the intensity and duration of heatwaves, while more volatile weather patterns can create consecutive disruptions, such as drought followed by flooding. The result is a growing likelihood of severe, compounding supply chain disruption. For companies, the direction is clear: exposure to climate-related cargo risks is increasing, making resilience and proactive risk management essential.
“With several parts of Europe facing unprecedented heatwaves, companies would benefit from reassessing how exposed their goods are during road transport, terminal waiting times and temporary storage. For cargo owners, extreme heat creates risks throughout the supply chain. Even short periods in high temperatures can damage sensitive goods or reduce shelf life, affect packaging performance and place additional strain on refrigeration units,” explains Eva Nyholm, Underwriter specialised in cargo insurance at If.
Heat can also affect the infrastructure that supply chains depend on. Roads, rail networks and logistics facilities may face operational challenges during prolonged hot weather. Drought can lower river levels and limit inland waterway transport, while water shortages can reduce transit capacity through key trade routes such as the Panama Canal.
These disruptions often lead to rerouting, longer transit times and port congestion, extending cargo exposure to heat, humidity and theft risks.
Heat is only one part of the climate risk picture; increasingly frequent heavy rainfall and flash flooding are also affecting cargo. These events can disrupt port operations, increase flood exposure for warehouses and put inland transport routes under pressure worldwide. Water damage to cargo during transit and temporary storage has become increasingly common, particularly in regions where logistics infrastructure is not designed to withstand severe weather.
“According to our experience, water damage to goods in transit and during temporary storage is increasing. In Asia, many storage sites close to ports are not prepared to withstand heavy rain or flooding. Containers may be placed directly on the ground, allowing water to flow inside, or goods may be loaded and unloaded in heavy rain. These conditions are contributing to rising warehouse accumulation losses, especially in Asia-Pacific and LATAM countries,” Nyholm says.
Humidity is another growing concern. Increased moisture levels can cause corrosion, mould, and condensation damage, particularly for machinery, electronics, textiles and other sensitive products.
“Storm patterns are also becoming less predictable. More severe storms and changing weather tracks increase the likelihood of vessels and cargo encountering unexpected conditions, raising operational and loss-related risks,” she continues.
The World Meteorological Organization 1) has warned of a high probability of El Niño conditions developing during the latter part of 2026. Historically, El Niño events have been associated with increased frequency and severity of weather-related disruptions across multiple regions.
Combined with longer-term climate change trends, these weather events can create systemic impacts that extend far beyond individual cargo losses.
“Climate impacts are no longer only a source of physical damage. They also drive disruption losses, port congestion and spikes in cargo accumulation during transit. Rerouting may introduce unfamiliar corridors with higher theft or handling risks, while greater reliance on multi-modal transport, from sea to rail to road, adds further complexity,” Nyholm shares.
The greatest challenge for many large enterprises is not a single cargo incident but the accumulation of risks throughout the supply chain.
“When cargo is delayed at ports, exposed to heat during road transport or temporarily stored in facilities not designed for today’s weather extremes, financial exposure can increase rapidly. Accumulation of high-value goods in warehouses, terminals or transit hubs can significantly amplify loss severity,” says Cargo Underwriter Marianne Zambrano from If.
The consequences often extend beyond physical damage to include:
As a result, cargo risk management should be integrated into broader supply chain resilience and business continuity planning.
Companies can reduce their exposure to these risks through a combination of simple, practical measures and more operational or technical actions:
Companies should regularly review their insurance policies to ensure the coverage reflects climate-related exposures, increasing cargo values, longer transit times and, where relevant, temperature-controlled transportation. However, managing climate-related cargo risks requires more than insurance alone. A comprehensive approach combines prevention, risk analysis and claims expertise.
“At If, we help businesses identify vulnerabilities in transport routes, storage arrangements and logistics operations. We act as a strategic sparring partner, helping companies navigate evolving risks and build resilience through prevention, advisory support and claims data insights,” Marianne Zambrano adds.
A key priority is preventing losses before they occur. This involves assessing transport routes and storage arrangements to identify vulnerabilities throughout the supply chain.
As climate change continues to reshape global supply chains, organisations that proactively address cargo exposures will be better positioned to protect assets, maintain continuity and control their total cost of risk and strengthen long-term resilience.
If helps businesses manage climate-related cargo risks through loss insights, expert advice and tailored insurance solutions. Our specialists identify trends and vulnerabilities, helping companies strengthen risk management, while efficient claims handling and recovery support help minimise disruption when losses occur.
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