(Last update: Mar-11)

Since the beginning of the conflict, Poland has started to handle more logistics as a hub for operations to Ukraine, with most goods now going to Ukraine via Poland.  There could be an increase in demand for trucking, sea freight and air freight to the Baltics and Poland in the coming weeks.

Fuel prices are now over USD 100 per barrel, reaching almost USD 103, with prices at USD 100 per barrel after 2014.  If OPEC does not increase production, or if the US and China do not release emergency stocks, fuel could reach over USD 115-120 next month.  This will have an immediate impact on transport costs and inflation in many markets and will reduce demand for air freight and further push demand towards sea freight.

While the withdrawal of Russian banking systems from the SWIFT system may cause major problems between Russia and the West, China may benefit from the ban as Chinese banks can process Russian payments without SWIFT.  Chinese payment gateways have also been very quick to react and offer to capture e-commerce and FBA payments.  This means that Russian demand for imported goods is likely to go to China rather than to Europe and the US, because of the ease of bank transfers and payments.
 

IMPACTS ON AIR FREIGHT:
Since the beginning of the conflict, the companies are bypassing airspace in Ukraine, and this week's fares have already been affected (increased fares and restricted space) by the new sanction below:

• All Russian AOCs will have no access to EU air space and other countries (list here).
• Effective from Feb 17th, all flights that fly via Russian airspace are blocked to go into European countries.

As a consequence, some Russian airlines such as SU and RU are 100% affected by the closure of airspace and canceled until further notice. AirBridgeCargo Airlines (ABC) have decided to temporarily suspend the international flights starting March 7. Aeroflot (SU), Russia’s flagship carrier, has announced that it will halt all international flights except to Belarus starting March 8. Other airlines are changing their routes to Europe (to avoid going through Russia), but any airline that has to change its route to avoid Russian airspace will still have a 2-3 hour delay due to an extra flight and an overall decrease in available capacity. Until an official statement is made, all flights via Russia will continue to be canceled.

Some airlines as Cargolux (CV) has also announced the implementation of a war surcharge, which can be followed soon by other airlines for the trades Asia to/from Europe. This War surcharge will be under the code XD in MAWB.

Air cargo demand from Ex-China is still lower than expected after the New Year holiday. However, fares to the EU will increase if Russian airspace is blocked by Russia. But it is unlikely that Russia will close airspace to Asian carriers.

 
IMPACTS ON SEA FREIGHT:
The Russian impact on container shipping keeps increasing.

Regarding the ports, Odessa (Ukraine) is currently not served. Some other port as Hamburg has now advised that they no longer handle containers going to or coming from Russia. This follows similar action a day ago in the port of Rotterdam. This will cause the congestion to worsen at North Europe‘s ports Already today Hamburg is one of the most affected ports

Regarding the shipping lines many of them has issued a customer advisory to announce that they won't longer serve Russian ports as: Maersk, Hapag-Lloyd, MSC, CMA, ONE, HMM 

Shipments destined for Ukraine are redirected to nearby ports in Romania, Lebanon, Greece, Turkey and Egypt.
The BAF (Bunker Adjust Factor) for Q2 will be adjusted upwards and announced this week according to CMA.

 
IMPACTS ON RAIL FREIGHT - SILK ROAD:
Due to the fact that the Silk Road rail traffic passes through Russia and Belarus, our teams and partners cannot currently guarantee the smooth flow of goods in these regions, so as a precautionary measure, our rail teams are putting on hold any new bookings for an extended period.



Our teams expect serious repercussions on world trade in the near future, particularly due to the sanctions imposed on Russia by other countries and further disruptions in the supply chain and the domino effect of higher fuel prices. 


ADDITIONAL INFO:
> Ukraine is the most important country in the Black Sea container market
> With the increase in the price of a barrel of oil, some fear a rise in the price of fuel and an increase in the overall freight rate. (LoadStar)

We will keep you informed of developments and all measures taken to ensure the smooth running of your operations. For further information, please contact your usual contact person or sales@bansard.com.