Container lines reroute Black Sea services as crisis worsens
With full-scale war now raging, there is no movement of goods in or out of Ukraine
The Black Sea is a minor trade for container shipping. But the wider implications of the Russian invasion cast longer shadows over the sector
CMA CGM has joined the ranks of container lines to announce service changes for its Black Sea operations following the Russian invasion of Ukraine.
“We have taken all necessary measures to protect our employees and ensure as much as possible the continuity of the supply chain,” the company said in a statement. “The safety of our employees and their families in Ukraine is our main focus. We are thankful to report that at the moment all of them are safe.”
CMA CGM has suspended vessel calls to Ukraine until further notice, “in the interest of safety”. As a result, its BEX and BSMAR services will no longer call at Odessa and bookings to and from Odessa are suspended.
A spokesperson for Bernhard Schulte Shipmanagement, which manages the vessel, has said the crew is safe, but it has been unable to leave the port despite orders from the Ukrainian government for all vessels to depart.
Meanwhile, German carrier Hapag-Lloyd has extended its booking suspension to Russia as well as Ukraine.
“The current situation in Ukraine and Russia has led to changes in the operational outlook for these countries,” Hapag-Lloyd advised customers.
Ukraine now has a booking stop, while Russia has a temporary booking suspension.
Hapag-Lloyd said it would advise customers over what would happen to cargoes already en route, but warned that terminal operations and inland transportation in Ukraine had stopped.
Following the imposition of sanctions on a number of Russian individuals and organisations in the UK, the British International Freight Association has advised members to ensure they are following government regulations.
“There are prohibitions applicable to certain categories of goods and exporters should check the regulations carefully before exporting goods to Russia,” Bifa said. “Members should also be careful if they suspect that goods may be shipped to one country and then either diverted or onforwarded to Russia.”
It added that forwards should be aware of the routing of their cargo and whether goes via, or in the case of airfreight, overflies Russia.
“Concerns have been expressed regarding some rail routes used to move goods such as the Trans-Siberian Railway, and many airlines have advised that they will no longer be flying over the Ukraine,” it said.
Since then Russia has closed Ukrainian airspace and barred UK airlines from Russian airspace.
“Members should check with their insurers regarding the impact on freight forwarder insurance and liability policies, as cover may be withdrawn and/or premiums increased for goods being shipped to/from Russia,” Bifa said.
Despite the immediate impact on Ukraine, the effect of the conflict on the wider container shipping sector is likely to be minimal initially, according to Drewry container research manager Simon Heaney.
“There were only three intercontinental services calling at ports in the region so disruption to international liner networks will not be catastrophic,” he said.
The fallout for international container shipping would likely take longer to materialise and the immediate operational threat was relatively low outside of the locality.
“Retaliatory cyber attacks that might affect shipping and fast-rising fuel costs are probably the main concerns right now,” Mr Heaney said. “The outlook for container shipping is intrinsically tied to the global economy and it is a near certainty that Putin’s gambit will lead to more economic volatility, heaping even more inflation on to people all over the world still reeling from the pandemic.”
How consumers reacted to high levels of inflation was one of the “biggest wildcards” when trying to predict the outlook for the container market,” he said. “Global port handling growth has been slowing for the past few months and another sudden increase in the cost of living would only serve to diminish prospects further.”