International Dispatches: Russia’s invasion of Ukraine — Supply-chain reactions and implications
3/9/2022
BIMCO: ‘War in Ukraine will hurt growth in all shipping segments’
The recent commodity price increases and supply issues related to Russia’s invasion of Ukraine “are likely to be felt throughout 2022,” officials from BIMCO said in a March 7 post on the company’s website. BIMCO is a membership-based, non-governmental organization with offices in Copenhagen, Singapore, Shanghai, Athens and London. Members include shipowners, local port agents and law firms.
Moreover, recently implemented sanctions on Russia could have “sustained spill-over impact on the global economy,” they said.
“The National Institute of Economic Research in the UK has estimated that the war could reduce global GDP growth by as much as 1 percentage point. No matter the specific Russia and Ukraine export developments, this will hurt growth projections for all shipping sectors,” said BIMCO Chief Shipping Analyst Niels Rasmussen. “All in all, we believe that despite possibilities of increasing ton miles demand for certain commodities, the war in Ukraine is a net negative for the bulk market driven by both a lack of commodity supply and reduced demand due to price increases. … Further steps to sanction some or all of Russia’s exports could cause further disruption although we believe that China may continue to be a taker for Russian commodities.”
On March 8, U.S. President Joe Biden said he’d sign an executive order that would ban Russian energy imports, plus U.S. investment in Russia’s energy sector.
Germany’s Federal Statistical Office: German sea ports will feel sanctions against Russia
The sanctions against Russia will affect Germany’s maritime transport, Germany’s Federal Statistical Office said on March 8. The Russian Federation was the No. 1 trading partner of German sea ports from January 2021 to November 2021 with 24.1 million tons of goods, 45% of which were fossil energy carriers, officials said. As for trading partner Ukraine: 0.6 million tons of goods were transshipped, 70% of them agriculture, forestry and fishing products, they added.
Port of Odessa resumes production of containers with ‘food imports and essential goods outside the enterprise’
“To all interested parties: We would like to inform you that there is a possibility of registration (detailed information on the procedure of container registration is given on the sites of container terminals) and export of containers from Brooklyn Kyiv-Port LLC and Odesa Container Terminal. First of all, cargoes with necessities and food are processed. Decorated cargo is carried out in electronic form, after its registration the container can be obtained at the terminal. Arrival at the terminals is carried out through the port checkpoints located on the territory of TVT.” — a March 5 post on the Ministry of Infrastructure of Ukraine/Odessa Seaport Authority website, translated from Ukrainian to English via Google Translate
Shown: a cargo terminal at the Port of Odessa. Shutterstock.com
RE: “the container logistics implications of war in Ukraine”
On March 3, Christian Roeloffs, co-founder and CEO of Container xChange, issued a message to the container leasing and trading marketplace’s customers on the logistics implications of Russia’s invasion of Ukraine.
“Parts of the Black Sea and Sea of Azov are now dangerous or unpassable,” Roeloffs said. “There have been missile attacks on vessels and ship arrests and lane closures for commercial shipping. The Ukrainian seaports of Odessa and Mariupol are closed/damaged/under attack. Trade and container movements have ceased. Cargo and equipment are stuck at ports.”
And due to ongoing shipping disruption in the Black Sea, the firm expects “container build-ups” regionwide. Maritime trade with Russia and Russian businesses “could be very difficult in the months and even years to come,” he added.
Roeloffs expects “this awful war to add to the stretched nature of global container supply chains," leading to higher inflation, and more disruption and delays.
“Overall, the situation for container availability is likely to worsen, but this will vary by port and region,” he said. “Central and Northern Europe is already congested, and any further trigger to the cargo flow will only worsen the state of container pile-ups.”
Roeloffs also expressed his “horror at the events of the last week and my deepest sympathy for all the Ukrainian families.”
“This is a tragedy for Europe and has shocked us all at Container xChange,” he said. “Our thoughts are with our friends in Ukraine. We can only hope that peace returns to this great country soon.”
ILWU Coast Longshore Division: 'We won't load or unload any Russian cargo'
"Effective immediately, #ILWU dockworkers will not load or unload any Russian cargo coming into or going out of all 29 U.S. West Coast ports.
“With this action in solidarity with the people of #Ukraine, we send a strong message that we unequivocally condemn the Russian invasion,” said ILWU International President Willie Adams.
“West Coast dockworkers are proud to do our part to join with those around the world who are bravely taking a stand and making sacrifices for the good of Ukraine.”
(International Longshore and Warehouse Union's Coast Longshore Division, in a March 3 series of Tweets)
Maersk suspends bookings to/from Russia, Ukraine
On March 1, Denmark’s A.P. Moller – Maersk suspended bookings to/from both Russia and Ukraine until further notice. Exceptions: foodstuffs, medical and humanitarian supplies. “We do, however, warn caution on still placing bookings for perishable cargo due to significant delays in key transshipment hubs that may damage the cargo,” Maersk officials said.
Meanwhile, European Union and U.K. customs authorities are inspecting all units to/from Russia transiting their terminals/ports to identify sanctioned and restricted shipments. “This is a direct consequence of the sanctions, but there are also indirect impacts as all cargo is getting delayed and our already congested transshipment hubs are getting more pressured,” Maersk officials said. “This is a global impact, and not only limited to trade with Russia.”
UIC: ‘We stand with Ukraine Railways and the Ukrainian people’
The International Union of Railways (UIC) has suspended the member companies of the Russian Federation and the Republic of Belarus “until the return of a peaceful situation in Ukraine,” UIC officials announced on March 8.
UIC comprises 200 members — including rail operators, infrastructure managers, railway service providers on all five continents.
“We are also expressing our strongest support to Ukrainian Railways,” UIC officials said. “They are continuing to operate under extremely difficult conditions, demonstrating that railways can and must remain a priority mode of transport for people, including humanitarian aid and evacuation of refugees.”
UIC established a refugee task force to “exchange know-how and identify ideas” for: managing migratory flow; bringing information to refugees and between railway companies for reception of refugees in stations; and providing solutions for preserving security.
“We are calling for maximum support from all railway companies and international organizations in this work, through their involvement and constructive input,” UIC officials said. “It is the fervent wish of the UIC that peace and stability will resume as soon as possible. The international railway community marks its solidarity with its Ukrainian Railways colleagues and the Ukrainian people, helping the movement of people and vital aid in this time of need.”
