Exploring How Physical Climate Risks Influence Asset Useful Life Estimation in the Transportation Sector

Background: The increasing frequency and intensity of physical climate hazards—including floods, extreme temperatures, storms, and rising sea levels—pose significant challenges to the transportation sector, which relies heavily on long-lived, capital-intensive assets. Conventional approaches to estimating asset useful life rely primarily on historical performance data and engineering assumptions, often overlooking climate-related stressors. This may result in inaccurate depreciation estimates and reduced infrastructure resilience. Objective: This study explores how physical climate risks are incorporated into asset useful life estimation within transportation organizations. Methods: This study adopted a qualitative exploratory design. Evidence was gathered through in-depth, semi-structured interviews with two key informants responsible for asset management at express-delivery companies affiliated with the East Java chapter of the Indonesian Express Delivery Companies Association (ASPERINDO). The interviews were complemented by a document analysis of maintenance and asset management records. The collected data were analyzed using the six-phase thematic analysis framework developed by Braun and Clarke. Results: Five themes were identified. First, physical climate risks accelerate asset degradation. Second, they increase maintenance costs and operational downtime. Third, useful life estimation is shifting from an age-based to a condition-based approach. Fourth, operational data increasingly inform revisions to accounting estimates. Fifth, adaptive organizational strategies moderate the effects of climate risks on asset useful life. Conclusion: Physical climate risks are an important factor influencing asset useful life estimation. Transportation organizations increasingly rely on condition-based estimation supported by operational evidence and organizational adaptive capabilities.