02 Mar, 2022
The ripple effects on Transportation & Logistics stemming from the ongoing conflict between Russia and Ukraine continue to evolve.
Observing the special nature of this situation and after careful consideration, we have effective 4th March, decided to suspend bookings to/from Russia and Belarus temporarily.
The suspension is valid for 14 days until 18th March, when we re-evaluate the situation.
Certain product categories are exempt from this measure, specifically aid and relief supplies, humanitarian supplies, medicine, and food.
Our rail service connecting China and Europe transiting via Russia remains open for service. However, we will daily assess the feasibility of keeping this service operational. This is to ensure we can continue to deliver on our customer commitments and as well recognize that further sanctions can come into effect.
Overview of the freight market
Within airfreight, the consequence of the closed Russian airspace is still significantly impacting flight schedules resulting in extended flight time and/or cancellation of flights.
Cargolux has introduced a war surcharge, and other airlines have announced fuel surcharge increases as a result of the rapidly increasing oil prices.
Ocean freight carriers continue to suspend bookings to/from Russia temporarily, latest have CMA-CGM and MSC followed in the footsteps of Hapag Lloyd, ONE, and Maersk.
Rail freight, as mentioned, continues to operate, but we foresee that delays will occur at border crossing points.
We expect a continued increase in port congestion in the East Mediterranean and the Black Sea area as a result of re-routings taking place. From earlier incidents, i.e., the Suez Canal incident last year, we have seen that trade lanes are inter-connected, leading to potential ripple effects throughout the network.
Despite no current actual impact, it is foreseen that Rail freight eventually will be impacted, and delays will come into effect.
We also assess that China will apply a continued push to keep the passage open considering China's investments in the Silk Road, which Rail freight is an important part of.
We still anticipate that the current situation will trigger an immediate capacity constraint across transport modes. Especially airfreight with soaring freight rate levels as a result, including oil price increases and war risk surcharges.
It is estimated that alternative arrangements will need to be found for up to 25 % of the total Asia-Europe airfreight capacity.
All information is given to the best of our knowledge and is prone to change.
We encourage you to keep close contact with us for priority shipments, allowing constant dialogue on potential alternative routing options.