Global shipping companies are starting to cancel or amend their services into Russia and Ukraine after countries around the world have imposed an unprecedented array of economic and other sanctions on Russia in the wake of Vladimir Putin’s invasion of Ukraine.
Last week Maersk halted ships going to Ukraine until the end of February and shut its Odessa, Ukraine office.
Maersk move
Today (Tuesday 1 March) the global shipping giant said it would temporarily suspend all shipments to and from Russia by ocean, air and rail, with the exception of food and medicine.
The Danish company said it was monitoring evolving sanctions on Russia, and preparing to comply with them.
Container shipping company Ocean Network Express (ONE) announced it was suspending booking acceptance to and from Ukraine (Odessa) and Russia (St Petersburg and Novorossiysk) “with immediate effect and until further notice” due to disruption and likely obstruction.
Port ‘standstill’
According to Hellenic Shipping News, the containers’ trade from Odessa has come to a standstill as the port is shut.
Ukraine and Russia are among the world’s largest exporters of agricultural commodities, such as corn, pulses, and wheat.
Carmakers could see shortages of other materials, reports the New York Times. Ukraine and Russia are sources for palladium and platinum, used in catalytic converters, as well as aluminum, steel and chrome.
Buyers are now looking for alternative sources as prices rise and sanctions on Russian banks leads to uncertainty over payments.
Other companies are following suit with Hapag Lloyd issuing a temporary suspension on bookings for Russia and sailings for Ukraine last week.
The Telegraph reports that MSC, the world’s biggest container line by capacity is maintaining shipping and inland services to and from Russia “in full compliance with international sanctions measures”.
Cargo screened
“Russia-related cargo will be accepted only with a thorough screening process by MSC with pre-payment required for all imports to Russia,” the company added.
Air freight rates are predicted to rise after the UK and EU banned Russian aircraft from their airspace, reports The Loadstar.
Russian carrier AirBridgeCargo, part of the Volga-Dnepr Group, has removed all its aircraft from Europe in the past three days.
The US is considering a ban on Russian airlines, but EU airlines associated with Volga-Dnepr – Cargologicair in the UK and Cargologic Germany – continue to operate normally, reports The Loadstar.
Routes across Russian airspace could also be affected, according to Finnair Cargo, which has cut all its operations to east Asia, ahead of a review of the situation on 6 March.
Capacity issue
The air cargo market continues to operate at a 10% capacity deficit because of reduced passenger flights due to COVID, making the situation more problematic, reports Freight Waves.
“This remains a crucial time for the industry where every cubic meter of capacity is needed, and with the impact of longer flight times as different areas of airspace become closed or prohibitions implemented, capacity will suffer,” said Glyn Hughes, director general of The International Air Cargo Association.
Rail link destroyed
The Ukrainian military destroyed railway links with Russia to prevent them being used to bring military equipment to the conflict, reports Railfreight.
Ukraine had been achieving some success in positioning its rail links as an important part of the New Silk Road route from China to Europe, according to Railfreight.
Chinese president Xi Jinping had underlined Ukraine’s importance for China’s belt and road initiative in a note he sent to the Ukrainian president in January 2022.
DB Cargo Eurasia sent out a notice to its customers last week that transport through the region was not possible.
Logistics companies Fedex and UPS are halting inbound shipments to Russia and Ukraine, reports TheHill.com