Air, Ocean, Road and Rail Update

Scan Logistics Global has made an overview of the latest changes to transport modes below:

AIRFREIGHT

• All flights to/from Ukraine remain suspended.
• The European Union has banned all Russian-owned and Russian-controlled aircraft from entering EU airspace.
• A number of airlines, including Lufthansa and KLM, have suspended flights to Russia for a preliminary period of 7 days and will neither utilise Russian airspace.
• Several airlines have informed that they will take a more southern route to avoid Russian airspace, even though it is still possible to transit – flight time will increase as a result, adding up to one hour of flight time.
• As a result of anticipated further airspace closure, the first airlines, amongst other Finnair, have started to cancel scheduled flights.

OCEAN FREIGHT

• All carriers have ceased service to/from Ukraine.
• Carriers have informed of the suspension of demurrage and detention charges for shipments to/from Ukraine until 3rd March. Additionally, no extra cost will be charged for re-routing or change of destination.
• Cargo onboard vessels will be discharged at ports in the Black Sea and East Mediterranean. CMA CGM utilises Constanza, Tripoli, and Piraeus, while Maersk has opted for Port Said and Korfez as a few examples.
• Hapag Lloyd has announced a full booking stop to/from Russia, while most other carriers still accept bookings.
• It remains unknown if the European Union will impose a ban on Russian-owned vessels destination EU ports similar to the imposed flight ban.

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., Suez Canal incident last year, we have seen that trade lanes are inter-connected, leading to potential ripple effects throughout the network.

This situation comes on top of an already challenged ocean freight market, and we foresee it will lead to delays overall and keep up the pressure on rate levels.

ROAD TRANSPORT

All borders are closed to/from Ukraine with certain exceptions of Aid & Relief and Government & Defence movements.

RAIL FREIGHT

• Rail freight from Asia to and from Europe remains fully operational for now, despite intense speculation on the the impact due to passage through Russia and Belarus.
• Russian railways are included on the sanctions list from the US however, there is no ban on transport via Russia as we speak.
• Most of the focus is currently on the potential impact of Russia being excluded from the SWIFT payment system and how China rail freight providers will respond to this. For now, it is considered that transactions can still take place.
• Since there is 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 passage open considering China investments in the Silk Road of which Rail freight is an important part.