Noatum Logistics USA has issued an operational update looking at the impact on global logistics as a result of the Russia-Ukraine war.

The forwarder said that the outlook for logistics operations in both countries has been severely altered. “The USA 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,” explained Noatum.

It added that bookings for Ukraine and Russia are temporarily suspended and the status of operations to/from Belarus is unstable. Some carriers have also imposed a war surcharge.

For airfreight, all flights to/from Ukraine remain suspended as well as most flights to/from Russia. The EU 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.

All floating cargo initially bonded to Ukraine will now be redirected to neighbouring ports such as Constanza (Romania), Tripoli (Lebanon) or Piraeus (Greece), among others. “In the case that a shipment was already scheduled to Ukraine or Russia, please know that our teams will remain available to handle each situation accordingly,” said Noatum.

Although some Russian vessels are still operational, it is very plausible a sanction similar to the one imposed on air operations will be enforced against vessels as well. 

It is also expected that there will be a great increase in BAF surcharges due to the escalation of oil prices. HLPFI reported last week that bunker prices are reaching record levels; very low-sulphur fuel oil (VLSFO) at Fujairah surged by USD76.50 per tonne last Monday to reach USD1,000, according to Ship & Bunker pricing. It said that this level is almost double the USD532.50 per tonne seen at the Middle Eastern hub this time last year. High-sulphur fuel oil (HSFO) also increased, by USD34.50 per tonne to reach USD692.

On the road, all borders to/from Ukraine remain closed, with certain exceptions exclusive for aid/relief and government/defence movements. While Russian borders continue to remain open, the crossing is difficult, and many transporters have chosen to cease operations to/from Russia.

Regarding railfreight 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,” Noatum continued, “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.”