As the Russia-Ukraine conflict continue to escalate, some players in the logistics and shipping sectors have announced a halt in their Ukraine operations.
This comes as Ukraine shuts its ports as a consequence of the conflict with its neighbour. Russia also earlier ordered the Azov Sea closed to the movement of commercial vessels until further notice — although it kept Russian ports in the Black Sea open.
Shipping giant Maersk said on Thursday that it has halted all port calls in Ukraine until the end of February. It has also shut its main office in Odessa on the Black Sea coast due to the escalating stand-off.
Maersks, MSC, CMA CGM halt port calls in Ukraine
"In light of Russia's latest moves on Ukraine that saw conflict break out overnight, we would like to give our valued customers an update on the situation and what it means for A.P. Moller - Maersk services across the region," Maersk said in an update on February 24.
"The current circumstances mean that Maersk has decided not to call any ports in Ukraine until further notice and will stop the acceptance of orders to and from Ukraine until further notice," it added. "Services in Russia, meanwhile, currently remain available but are potentially subject to change as things develop."
Maersk calls at the port of Pivdenniy, one of the leading ports of the Black Sea some 30 kilometres (19 miles) east of Odessa. It operates two container shipping routes to Ukraine.
CMA CGM said it is also halting all its Ukraine port calls.
"The CMA CGM Group has been closely monitoring the situation in Ukraine and the Black Sea region. Over the past several days, we have taken all necessary measures to protect our employees and ensure as much as possible the continuity of the supply chain," the French shipping line said.
"In the interest of safety, the Group has decided to suspend all vessel calls to Ukraine as of today and until further notice."
It said due to this the BEX and BSMAR services will omit Odessa, Ukraine and bookings to and from Odessa are suspended. Meanwhile, the floating cargo to Ukraine will be redirected to the ports of Constanza (Romania), Tripoli (Lebanon) or Piraeus (Greece).
MSC said there was an "ongoing and rapidly changing security situation in Ukraine" and that its vessel MSC Jessenia R had to deviate during its voyage and will omit Odessa.
"For the time being MSC ships will not call at Ukrainian ports and we are implementing various other operational changes to other vessels in the region to make use of our wide Black Sea port network. In such cases we will declare the voyage as ended in the last port prior to Ukraine," the liner added.
MSC warned that stacking areas in the region are already very full, and the Ukraine situation could exacerbate existing global supply chain disruptions.
FedEx for its part said it is "closely monitoring the situation and have contingency plans in place" emphasizing that the safety of its team members is "our top priority."
"Due to the current circumstances, the provision of services in Ukraine has been suspended until further notice. Please follow the news on the provision of services here," FedEx said, adding that shipments already in transit will be temporarily held in its network.
Like FedEx, global logistics firms UPS also suspended services in and out of the country.
Initial impact of Ukraine attack "quite severe"
Lars Jensen, CEO of liner consultancy Vespucci Maritime, said the initial strike of Russia in Ukraine on Thursday is already showing a big impact to shipping.
"The initial impact of the Ukraine attack is quite severe when you look at the financial indicators in container shipping," Jensen said in a Linkedin commentary.
He said in terms of share prices the status as of 12:20 (CET) is a sharp drop for key container carriers where Maersk is down -7.8% and Hapag-Lloyd is down -8.5%, although he said that it is "hard to gauge" the impact on the Asian carriers' share price as the stock exchanges closed as the early phases of the attack became clear.
He also noted that brent crude is already up 8.6% to 105 USD/bbl and hence we might expect global average VLSFO prices for bunker to shortly come above 800 USD/ton having already risen to 779 USD/ton yesterday as per Ship&Bunker.
"The large forwarders are also impacted as DSV sees the share price drop 5.4%, Kuehne&Nagel down 4.9%," Jensen added. "Adding insult to injury, Expeditors have already plummeted in recent days as they struggle with the aftermath of a major successful cyber attack which impacted them Sunday."
Impact on air cargo, global economy
Meanwhile, The International Air Cargo Association (TIACA) said the initial blow of the Russia-Ukraine crisis will impact oil prices — and will drag not just air cargo but the whole supply chain in general.
"We've already seen the last few months since the escalation around Ukraine, price of oil has risen dramatically as it always does in times of conflict which is of course putting up the cost of all methods of transport essentially fueling the increase in inflation," Glyn Hughes, director-general of TIACA said during the organization's Media Day 2022.
He noted, however, that "much of the air cargo coming in and out of Ukraine over the last 12-18 months have already been dropping quite dramatically" although the "longer it drags on" the bigger the impact would be on the broader supply chain and world economy.
"Any time of conflict, if you look historically, what will happen is that price of oil goes up, the impact of consumer behavior in other states, you can expect the markets having a negative impact ... sadly in times of conflict the potential ramifications expand so it's more of a question on the impact to the broader economy," Hughes added.
Steven Polmans, TIACA chairman, for his part said: "Uncertainty is not good for the economy and if economy is not good, air cargo is not doing good."
