Aviation
MAERSK SAYS RUSSIA-UKRAINE WAR HAVING IMPACT ON GLOBAL SUPPLY CHAINS
March 8, 2022
Mathilde_Maersk_(ship,_2015)_002

Maersk, one of the world's biggest shipping and logistics groups, said the continuing conflict in Ukraine is hurting the global supply chain and pushing rates higher as transport routes are dropped and fuel prices soar.

 

In several customer advisories, the Danish shipping line has informed its customers that it has halted its ocean and airfreight services to and from Russia and Ukraine. It has also temporarily halted its rail services between Asia and Europe as the war range on.

 

In one advisory, Maersk said customs authorities in the European Union (EU) are now 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 transhipment hubs are getting congested, impacting our customers' supply chains," it said. "This is a global impact, not limited to trade with Russia."

 

Maersk also warned its customers that the cost of air freight would go up due to airspace restrictions and rising fuel prices due to sanctions imposed by multiple countries in the West to Russia.

 

Ripple effect on supply chains

 

"The conflict in Ukraine and subsequent legal sanctions imposed against Russia by governments around the world has created a ripple effect across the global supply chain. We are seeing a high degree of uncertainty and significant delays on the network, while restrictions and stringent checks at transshipment hubs have impacted the readiness of export cargo from Asia," Maersk said on a March 8 advisory.

 

It added that in an effort to adjust its network deployment across the market, it has taken out the AE6 service and the liner will reintroduce a replacement in the next rotation.

 

In its March 4 advisory, Maersk cancelled its Belarus services.

 

"As the crisis in Ukraine continues and governments impose new sanctions on Russia and its allies, A.P. Moller – Maersk is keeping a close eye on developments and making necessary adjustments in line with the latest restrictions," it said.

 

"After careful consideration, we now see the clear need to establish new and revise existing processes of accepting and handling bookings for Belarus. We already have strict controls in and out of Belarus in connection with existing sanctions, but we must now ensure our processes comply with the latest sanctions and import controls with regard to the crisis in Ukraine."

 

"For Belarus, going forward, only bookings for foodstuff, medicines and humanitarian supplies (except dual use) will be accepted after extensive screening ... as Maersk acts in full compliance with legal regulations and its policies, we cannot engage with, receive from or make payments to any sanctioned banks, or any other sanctioned party – including Belarusian and Russian parties," it added.

 

Rail services halt

"Off the back of newly imposed sanctions, Maersk has now temporarily suspended new intercontinental rail bookings without exception both east and westbound between Asia and Europe until further notice," the Danish line said. "Maersk has also suspended all new air bookings to and from Russia and Ukraine until further notice."

 

Maersk continued: "We do see a potential risk to the cost of air transportation, as airspace gets restricted and flights are further subject to rising fuel and insurance costs."

 

Lars Jensen said it would become even harder for companies to secure space on vessels if rail links between Europe and China – which go through Russia – are shut off.

 

"If this is stopped, this would add almost 10,000 TEU [twenty-foot equivalent containers] per week of demand on to the Asia-Europe services where it would compete for space on vessels which are already full," the Danish shipping analyst and founder of the Vespucci Maritime consultancy said in a LinkedIn post.