A host of top container lines – with the notable exception of China’s COSCO – have suspended taking bookings to Russia in the latest shipping pullback from the region in the wake of last week’s invasion of Ukraine.
Explaining the decision by the likes of Maersk, MSC, CMA CGM, Hapag-Lloyd and ONE to drop Russia, with the exception of medical equipment and food bookings, Lars Jensen, CEO of liner consultancy Vespucci Maritime, wrote on LinkedIn: “This is essentially a way to mitigate risks in the wider supply chain. Services to Russia are still operating, but if they are suddenly stopped then all the containers already on the vessels would get stuck in the major hubs in Europe and worsen the congestion problem.”
Dry bulk firms including Klaveness, Lauritzen Bulkers and Norden have also publicly stated they will stop calling in Russia as have a number of tanker companies, all of whom face hugely inflated insurance costs plus financial and regulatory hurdles to get there after Moscow was hit by many sanctions last week.
“Out of approximately 44,000 cargo and tanker vessels operating in the world in the last two years, approximately 2,000 are owned by companies registered in Russia. This means that any shipowner, shipping company, trader or bank working with Russian companies is immediately more exposed to risk as they can be blacklisted at any given time,” a recent update from Israeli maritime AI platform Windward warned.
“With this uncertainty in mind, all future deals including Russian entities and vessels are at risk of being canceled or renegotiated,” Windward predicted.
Canada has joined the UK in deciding to shut its ports to Russian-owned ships later this week in response to Moscow’s invasion of Ukraine, transport minister Omar Alghabra said on Tuesday. European Union politicians are expected to debate similar legislation soon.
Singapore’s biggest banks have this week restricted trade financing for Russian raw materials. The limits include a halt on issuing letters of credit in US dollars for trades involving Russian commodities, including oil and liquefied natural gas.
The one important country outwardly stressing it is business as normal with Russia is Beijing. The Chinese foreign ministry reiterated today Beijing and Moscow will continue to carry out regular trade cooperation, with China stressing it firmly opposes any illegal unilateral sanctions.
On the ground, Ukraine’s top ports have faced a barrage of attacks. Reports suggest that the port city of Kherson has fallen to Russian forces this morning, while Mariupol is surrounded but not taken.
Odessa, meanwhile, Ukraine’s largest port, is bracing for a naval assault.
“In the Black Sea Operational Zone, the enemy deploys a naval group and continues preparations for a naval landing operation,” a social media post from the General Staff of the Armed Forces of Ukraine stated this morning.
Many ships remain in Ukrainian waters having failed to escape. However, an interesting development regarding bulk carriers, as picked up by analysts working for shipping platform Sea/, are the number of ships stating their destination as Constanza, Romania. Sea/ now has 48 vessels heading towards Constanza compared with typically around 25 at the start of February.
“There has been no confirmed reports of overland trade from Ukraine as of yet but the increase of arriving tonnage – particularly given a large amount is going to load – would suggest there’s a possibility of it,” a spokesperson for Sea/ told Splash.
The price of oil shot up further today, with Brent crossing the $110 per barrel mark.
For all the news on how the invasion of Ukraine is affecting global shipping, check out Splash’s dedicated coverage here.
