25/02/2022
Following Russia’s decision to invade Ukraine, shippers can expect yet another hike in freight rates, along with fuel costs, surcharges and further supply chain disruption. One forwarder said, “the Russian invasion of Ukraine is likely to exacerbate global supply chain issues and is already leading to price hikes in commodities, including fuel, which is spiking.”
Supply chain economist, Chris Rogers, said, “the [conflict] could cause both physical disturbances to supply chains, as well as a reduced ability for international buyers to transact. In turn, there’s also likely to be increased commodity prices, which could further exacerbate ongoing global supply chain inflation.”
Many have also expressed concerns regarding the potential for more cyber-attacks, which could cause greater damage to the industry.
Furthermore, conflict, increased border controls and sanction enforcement are all likely to contribute significantly to delays within the region.
Warnings have been issued of a global spread where, “a ripple effect is likely to increase delays and costs around the whole supply chain.
In Ukraine, global logistics companies are ceasing operations, amid concerns for staff safety. One forwarder indicated that they are observing the situation with the greatest concern saying, "we have paused our logistics operations in Ukraine and asked our employees to stay home.”
Concurrently, truckers are warning that they will become “ever-more selective” in the jobs they pick amid fuel price uncertainty. After Russia’s announcement of its “special military operation”, crude prices surpassed $100 a barrel for the first time in eight years. Rising fuel prices would have a “major impact” on not only costs, but the road freight routes chosen by operators.
Many are holding their breaths as other impacts from the invasion would no doubt make themselves felt in due course. The haulier added, “we will watch and see where Putin is going with this, and what is his outcome. If I were an egotistical, paranoid, oligarch-like mad dictator, I would target, digitally or physically, global trade – ie, shipping. Hopefully it will de-escalate, but I doubt it.”
For the latest news, view our Tomax Newsletters issuu.com/tomax_magazine
To become a subscriber, please email [email protected]