How will the Ukraine crisis impact supply chains and global logistics?
The Ukraine crisis is likely to have a significant impact on global supply chains and logistics. Both air freight and sea freight will be affected by recent events.
A number of western airlines are currently barred from Russian airspace in retaliation for Russian airline, Aeroflot, being banned from the airspace of a number of European countries such as the United Kingdom (UK).
AerCap Holdings, the global leader in aircraft leasing, announced it will cease leasing activity with Russian airlines due to European Union (EU) sanctions. AerCap must end all its leasing activities in Russia by the end of March. An estimated 140 aeroplanes will need to be recovered from Russia.
Boeing and Airbus have suspended maintenance, technical support and sending spare parts to Russia.
Redirecting flights from Europe to north Asia could add another 12-14 hours to flight times for cargo. There is likely to be a reduction in air freight capacity over the next few weeks.
The UK Department for Transport is drawing up a “blacklist” of vessels that will be distributed to UK port officials.
The European Parliament adopted a resolution on Tuesday 1 March, calling for EU ports to block Russian vessels from entering. The EU restrictions go further than the UK and include “ships whose last or next port of call is in the Russian Federation, except in the case of necessary justified humanitarian reasons”.
Canada has also implemented a ban on Russian vessels entering ports.
In addition to government sanctions, many dock workers around the world are refusing to load or unload Russian cargo or vessels.
Blocking vessels owned or controlled by Russian interests from entering ports will be complicated according to Lloyd’s List Intelligence data. This is because it may be difficult to determine whether vessels are flagged, owned or operated by entities based in Russia.
It is anticipated that governments will focus on the approximate 400 trading vessels over 10,000 dwt.
Global supply chains already under strain before the Ukraine crisis
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