Ukraine crisis: supply chain update
While the situation in Ukraine is unfolding rapidly it is clear that the turmoil in the region and the sanctions imposed on Russia are likely to have a considerable impact on global supply chains. With the price of oil already spiking past $100 per barrel, fuel costs are inevitably set to rise across all modes of transport. For example, additional BAF increases (Bunker Adjustment Factors) look set to be imposed by some major shipping lines, which will hit shippers on short-term / spot deals the hardest. Fuel and utility costs are also set to see increases for property and warehousing.
Industry observers indicate that supply chains are also facing additional strain due to ‘panic planning’ and potential stockpiling in the UK’s already overburdened warehouses. In the absence of new warehousing capacity, any such stockpiling activity is likely drive up rates.
Additionally, customers should be aware that cargo routing from, through or over the area will face disruptions and restrictions across all modes of transport. This includes closures or embargoes of major shipping ports (such as Odessa), air freight overflying Russian territory and even Far East rail services transiting Russia (such as the Trans-Siberian Express).
Reductions in air cargo capacity are also set to increase. For example, Aeroflot, the national carrier of Russia, has been banned from landing in the UK. In retaliation, the Russian civil aviation authorities have slapped a reciprocal ban on UK flights to and over Russia. This, plus the number of charter operations with aircraft registered in Russia that could be impacted, looks set to see businesses seeking alternative transport options such as ocean freight.
Uniserve is monitoring the situation constantly and working hard to minimise the impact upon our customers’ cargoes. However, we encourage you to contact your Customer Development Manager should you have any concerns on 01375 856060 or email email@example.com.
Meanwhile, the Government has provided assistance for any businesses seeking further guidance on the implications / applications of the UK sanctions against Russia. You can also get advice on how exporting goods to the region has been affected here.
The thoughts and prayers of everyone at Uniserve are firmly with any of our customers, colleagues, family, friends…in fact anyone affected by the Russian invasion of Ukraine.
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