Russia-Ukraine war: Impact on global logistics

Russia-Ukraine war

As the conflict between Russia and Ukraine grows, the operational outlook for logistics operations with these countries has been severely altered.

Several countries and the EU have imposed new trade sanctions and export controls against Russia, Belarus and the Ukranian regions of Crimea, Donetsk and Luhansk.  Additional restrictions are expected. Even if your transactions continue to be permissible, the new sanctions may make difficult any future operations.

Please bear in mind that bookings for the affected territories are temporary suspended. Some carriers have also imposed a War Surcharge from this week and until further notice.

 

We have compiled a list of relevant outlooks for logistics operation involving these counties:

 

  • Airfreight

    All flights to/from Ukraine remain suspended as well as most flights to/from Russia, also the European Union has banned all Russian-owned and Russian-controlled aircrafts from entering EU airspace.

    Many airlines will also avoid Russian airspace by taking a more southern route, as a result, flight times will increase. Consequently, this situation is impacting in the services and airlines are implementing surcharges.

 

  • Ocean freight

    All floating cargo initially bonded to Ukraine will be now redirected to neighbouring ports such as Constanza (Romania), Tripoli (Lebanon) or Piraeus (Greece), among others. Please know that our teams will remain available to handle each situation accordingly.

    Please note that, by this time, some of the main carriers such as CMA CGM, Maersk, Hapag Lloyd and MSC have suspended all operations to/from the affected territories.

    Apart from this, it’s expected a great increase in BAF surcharges due to the escalation of oil prices.

 

  • Road transportation

    All borders to/from Ukraine remain closed, with certain exceptions exclusive for Aid & Relief and Government & Defence movements.

    While Russian borders continue open, the crossing is difficult and many transporters have chosen to cease operations to/from the affected territories.

 

  • Rail freight

    Regarding the rail freight operations between China and Europe, all current and new services are being assigned to Ocean Freight.

 

All this being said, the Russia-Ukraine crisis is expected to affect world trade heavily in the near future, especially in view of the aforementioned sanctions. Among the outcomes, it can be expected an increase of transportation and logistics costs, supply chain disruptions, rising gas and electricity prices, etc.

As many countries announce the exclusion of Russia, and more recently Belarus, from the SWIFT payments system, transactions with both countries are very difficult to complete. Apart from the USA, EU, UK, Canada, Switzerland, Japan, Australia and New Zealand have already announced sanctions against Russia and more are expected to come.

The Noatum Logistics team will keep monitoring the situation and keep everyone posted as accurate as possible.

In case of any questions, please feel free to get in touch with us.