Logistics in times of war
The world has been shocked by Russia's military invasion of Ukraine.
In reaction to this, in combination with the reception of refugees and the sending of (aid) goods, sanctions have also been imposed on Russia and Belarus, which have consequences for the import and export of goods from and to these countries.
Several shipping companies have announced that they will stop trading with Russia and will no longer sail to Russian ports. Due to the war, the Ukrainian ports of Odessa and Mariupol are not accessible.
CMACGM, Evergreen, Maersk and MSC have announced a booking stop for all Russian destinations with immediate effect. This applies to all modalities of transport. Earlier ONE and Hapag-Lloyd already announced that they would no longer sail to the Russian ports.
For cargo that is already underway, the shipping company concerned will do its best to deliver it to the port of destination. However, serious delays and the possibility that no more deliveries can or may be made must be taken into account.
Within the new sanctions against Russia, Customs decided last weekend to stop all containers with destination Russia. The containers will be released if they do not contain sanctioned goods (goods that can be used as dual-use goods, i.e. for both civilian and military purposes).
Due to the enormous number of blocked containers, there have been delays in the customs process; customs is currently working on clearing the backlog. The Dutch customs authorities are also in consultation with the authorities in the ports of Belgium and Germany to see how to deal with the containers that are not allowed to proceed to their destination or remain on board ships.
In addition to sea freight, there are also far-reaching consequences for aviation. The EU and the US have closed the entire airspace to all Russian aircraft.
European and American airlines are also choosing not to fly over Ukraine, Russia and Belarus. The consequence of these measures in aviation is further capacity restrictions with the financial consequence that spot rates are rising in the market.
How long the New Southern Route (China-EU railway) by rail will continue to function is currently the question. It is still possible to run trains but the question is to what extent this is still desirable. It is also not yet known whether this railway line will continue to function properly. At the moment, Russia transports a lot of military equipment via this railway line.
For road transport, waiting times are increasing due to strict controls between Ukraine's border with various EU member states, such as the Russian border with Estonia, Latvia, and Lithuania. The border between Ukraine and Russia and between Ukraine and Belarus is even completely closed.
A direct financial consequence is the increase in fuel costs, which have risen to unprecedented levels worldwide. This is already noticeable for both companies and private individuals. Unfortunately, we are forced to pass this surcharge on to you as a customer. The price of other raw materials such as wheat, corn and sunflower oil is also skyrocketing.
Seven Russian banks have been excluded from the international payment system SWIFT. They are Vnesheconombank (VEB), Bank Rossiva, Sovcombank, Bank Otkritie, Novikombank, Promsvyazbank and VTB BANK.
The sanctions may also affect Russia's willingness to repay debts. The usual war clause (M3) in cargo transport insurance has come into force. This usually has an impact on the coverage.
Due to the sanctions, slow payments or no payments at all have to be considered as payment traffic has almost come to a standstill. The value of the rouble has already fallen significantly.
The current situation is causing constant changes and adjustments. We continue to keep a close eye on the situation and recommend that you discuss with your contact person within Jordex.