As the conflict between Russia and Ukraine grows, the operational outlook for logistics operations with these countries has been severely altered.
The United States has imposed trade sanctions and export controls against Russia. Sanctions involving financial operations have been imposed by the EU. These restrictions are getting more rigorous and continue to escalate. Even if your transactions continue to be permissible, the new sanctions on Russia’s financial system may make any future operations difficult, in some cases blocking payments.
Please bear in mind that bookings for both Ukraine and Russia are temporary suspended, and the status of operations to/from Belarus is very unstable. Some carriers have also imposed a War Surcharge to be imposed from this week and until further notice.
We have compiled a list of relevant outlooks for logistics operation involving these countries:
All flights to/from Ukraine remain suspended as well as most flights to/from Russia. 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.
- Ocean freight
All floating cargo initially bonded to Ukraine will now be redirected to neighboring ports such as Constanza (Romania), Tripoli (Lebanon) or Piraeus (Greece), among others. In the case a shipment was already scheduled to Ukraine or Russia, please know that our teams will remain available to handle each situation accordingly.
Although some Russian vessels are still operational, it is very plausible a sanction similar to the one imposed on air operations will be imposed to vessels as well.
Please note that, by this time, some of the main carries such as CMA CGM, Maersk, Hapag Lloyd and MSC have suspended all operations to/from Russia. Apart from this, it’s expected that there will be 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/defense movements.
While Russian borders continue to remain open, the crossing is difficult, and many transporters have chosen to cease operations to/from Russia.
- Rail freight
Regarding the rail freight operations between China and Europe, there is no major impact on Noatum’s China – Europe rail services in both directions for the time being.
The schedule is developing as planned for March, as Ukraine is not one of our main routes to/from Europe. Only one of the routes from/to Budapest will be adjusted to avoid crossing through Ukrainian territory.
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. The EU, UK, USA, 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 updated as accurately as possible.
If you have any questions, please contact your local Noatum Logistics representative.