SUPPLY CHAIN ALERT AND RECOMMENDATIONS: UKRAINE CONFLICT

We are closely the evolving situation and evaluating the wider supply chain impact of the sanctions and restrictions that are being imposed on the Russian regime.

With so much uncertainty and ‘Force Majeure’ being called by insurers, carriers and other operators, we recommend the suspension of all shipments into or out of Ukraine, Russia, Belarus and the wider region.

These are some of the week’s most significant supply chain developments:

• JAL and ANA have cancelled all flights to/from Europe, while Russian cargo carriers have withdrawn from the market and the avoidance of Russian air space will disrupt operations – all of which effectively reduces capacity – with a direct impact on rates.
• Rail from/to China should be avoided – particularly where it transits Russia/ Ukraine – as it is either not functioning, or cargo is not being accepted.
• Carriers and many other operators have closed Ukrainian and Russian offices and warehouses.
• The UK government is directing ports to reject Russia-bound cargo and Russian flagged, registered or controlled vessels.
• There are delays and detention of cargo by overseas customs authorities seeking Russian and prohibited cargo.
• Fuel prices are increasing dramatically and we are anticipating emergency fuel surcharges will be applied on all modes.
• The DfT advises that additional sanctions targeting Russian shipping are being developed.

In summary, we would recommend avoiding Russia, Ukraine and Belarus, and expect the impact of sanctions, restrictions and prohibitions to ripple out geographically, and across all transport modes.

We will be monitoring the evolving situation closely and will keep you informed of the most important developments. Please don’t hesitate to contact my team, or me directly, if you have particular concerns, or simply want to review potential ramifications for your business.