Ocean freight travelling close to Russian ports has considerably dropped since global sanctions were imposed on the country during late February. Besides, more disruptions to sailing schedules are also expected to result in sluggish global supply lines in the months ahead, per a report from project44, a logistics software vendor.
The company tracked a 54% decline in vessel traffic within 50 nm of Russia’s ports from 1 February and 4 March, resulting from suspended bookings to Russia as its invasion of Ukraine intensifies. From 1 March, ocean carriers Maersk and MSC have suspended cargo bookings from and to Russia, including access areas that are in close proximity to the Black Sea, the Baltic Sea, and the Russian Far East. France-based shipping giant CMA CGM, German shipping lines Hamburg Sud and Hapag-Lloyd, along with other major carriers, have also suspended bookings in the region.
There has been a sharp decline in ocean freight that’s reaching Russian ports; daily peak TEU vessel volume has dropped over 40% from 1 February to 3 March, per the report based on data sourced from the firm’s Supply Chain Crisis Tracker.
Logistics industry professionals agree that the situation will result in immediate and long-term effects on supply chains, most significantly by reducing capacity and increasing energy prices.
The supply chain has been strained for about two or three years now. Now, capacity moving in and out of Eastern Europe is also being cut off, said Bill Thayer, the CEO, and co-founder of Fillogic, a logistics-as-a-service platform. The global supply chain issue has been about capacity. And now, more capacity is being redacted from the network.
Oil prices continue to experience a surge, resulting in fears of more inflation and a higher cost to ship items. Per observations of the Logistics Manager’s Index, there has been a sustained rise in transportation rates over the past year and a half. Researchers said during last week that they are expecting upward pressure to continue on pricing in the light of problems caused by the crisis in Eastern Europe.