Analysts Warn of Record El Niño as Supply Chain Strain Compounds

By Ashley Prince | September 4, 2026

Shippers moving freight through the Pacific and along Mexican trucking corridors this fall should prepare for unpredictable conditions and constrained lead times. NOAA’s Climate Prediction Center puts the odds of a “very strong” El Niño above 90% through winter, with sea surface temperatures in the eastern equatorial Pacific already running more than 3°C above average.

At that level, this El Niño could rank among the strongest events on record since 1950. 

Analysts working with Dragonfly from Dow Jones are watching the event closely. Global Risk Analyst David Fallshaw-Daniels and Intelligence Analyst Eddie Bejarano identified where the exposure risk is highest right now.

“The reason why El Niño is so dangerous is the lead time,” Fallshaw-Daniels said. He called this year’s pattern “unprecedented in the extent to which it warms temps.”

Where is the risk concentrated?

Hawaii sits toward the top of Dragonfly’s list to watch, according to Bejarano. 

NOAA’s Central Pacific Hurricane Center backs that assessment up. There are five to 13 tropical cyclones forecast for the islands this season, significantly higher than the historical average of four to five. The basin is living up to that forecast. As of September 4, Hurricane Lowell was a Category 4 storm passing roughly 585 miles south of Kauai after briefly reaching Category 5 strength earlier in the week, one of two major hurricanes active in the Pacific. Lowell is forecast to stay south of the islands through Saturday before turning north. The last comparably strong El Niño, in 2023, produced Hurricane Dora. The storm never made landfall in Hawaii, but its winds helped fan the fires that destroyed Lahaina.

While California’s direct hurricane exposure tends to be limited, storms that hit Northern Mexico still send wind and rain bands into the Southwestern U.S. and damage infrastructure well inland.

Fallshaw-Daniels flagged the mirror-image problem on the other side of the Pacific. During an El Niño, typhoons form farther east than usual, spending more time over open water and absorbing more heat before reaching land. That puts China, Japan, and South Korea at particular risk. 

During the last strong El Niño year in 2023, the basin produced 17 named storms, including 10 hurricanes.

In October 2023, Hurricane Otis went from a 65-mph tropical storm to a 165-mph Category 5 in under 24 hours before hitting Acapulco. That is the fastest intensification ever recorded ahead of a Pacific landfall and the strongest hurricane on record to hit Mexico’s Pacific coast. 

Twenty-four hours out, official forecasts still called for nothing worse than a Category 1. That lack of lead time is exactly what shippers should be aware of moving into the next few months.

“We are seeing hurricanes intensify over a much shorter window than in the past,” Bejarano said. “That leaves shippers with a difficult challenge. The scale of a Cat 5 is hard to prepare for.”

The Cost of Road Closures

For freight moving from Western Mexico into the U.S., navigating highways after storms can become a real challenge.

“Damage inland in Mexico tends to be quick and substantial,” Bejarano said. “A single stretch of highway being shut down paralyzes the supply chain.”

Emergency lanes tend to reopen within 24 to 48 hours for military and rescue vehicles, but commercial trucks wait longer, often stretching days to weeks. After Otis, mudslides in the mountains outside Acapulco blocked even the 10,000 troops sent to help, and the city’s commercial airport didn’t manage limited flights again for three days.

There’s a security cost associated with that kind of wait time on the highways. Some routes run through areas with a strong cartel presence, and stranded trucks raise the risk of cargo theft on top of the storm damage.

A Perfect Storm

The Panama Canal Authority has cut the maximum draft at its Neopanamax locks four times since early July as Gatun Lake drops under the strengthening El Niño. It’s the same playbook as the 2023-24 drought, when daily transits dropped from around 36 to as few as 18, pushing priority-slot auction prices as high as $4 million a vessel. 

This El Niño, however, is not the only disruptive force facing the supply chain today. A series of different issues spanning the globe have put pressure on shippers, regardless of the weather.

Fallshaw-Daniels noted that ongoing disruption at the Strait of Hormuz has added to the strain on the supply chain. Since U.S. and Israeli strikes on Iranian targets in late February, Iran has contested the strait and disrupted shipping through it. Crude flows fell from roughly 21 million barrels a day before the conflict to under 5 million by the second quarter, according to the Congressional Research Service. That disruption, running alongside the weather risk, has created something of a perfect storm in the supply chain.

In the U.S., deteriorating infrastructure is an issue that precedes and will outlast any one specific weather risk, according to Bejarano. The American Society of Civil Engineers gave the nation’s roads a D+ and transit a D in its 2025 report card. It put the roadway funding gap at $2.2 trillion, even accounting for recent federal investment. Bejarano said storm intensity is outrunning the system’s ability to keep up, while infrastructure spending competes with security budgets for the same dollars.

Shippers also can’t afford to let their guard down regarding potential Atlantic hurricanes. NOAA is forecasting below-normal Atlantic hurricane activity this year, largely because El Niño raises wind shear in the basin. While this is typical of the weather pattern, a lower average does not mean a serious storm is impossible. One storm can shut down East Coast operations. 

“We shouldn’t forget about the Atlantic hurricane season,” Bejarano said. “El Niño will suppress that activity, but just one bad hurricane can take months to recover from.”

How Can Shippers Respond?

The shippers handling this kind of disruption well aren’t those optimizing route by route. The most proactive companies are planning at the network level.

There are a few steps shippers can take to build resilience into their supply chains ahead of a difficult season. 

• Build slack into Panama Canal transit planning.
• Treat Hawaii and the Mexico-to-Southwest corridor with elevated caution this fall.
• Line up alternate routing and security protocols for any major Western Mexico highway closures.
• Don’t forget about risks in the Atlantic.