As businesses across the world begin to conduct operations with ease after the bettering condition from the COVID outbreak, the global economy is once again put in the spot by the Russia-Ukraine war which is severely disrupting shipping and air freight.
In light of the same, the FIATA Multimodal Transport Institute (MTI) earlier this week held a meeting to discuss the impacts of the ongoing events in Ukraine on freight forwarding and logistics across the sea, rail and road transport.
The Russian invasion apart from having a dramatic human consequence has also weekend already hurt global supply chains as shipping routes are cut, logistics firms suspend their services to and from the nations and air freight rates skyrocket following the closure of air space.
Challenges such as driver shortages, difficulties to transport cargo within the affected region, and capacity issues are being faced by the industry. Furthermore, elevated fuel price after Russia’s attack on Ukraine has also been a challenge for the industry as a whole. It has increased the transportation costs, also shipping companies are facing increased container pricing.
On top of it, the significant sanctions on Russia amid the invasion have also increased the shipping or air freight cost and had an impact on China-Europe rail freight that travels via the New Silk Road trade routes that traverse Russia and Belarus.
Addressing the challenges, FIATA MTI noted multimodal solutions as key to ensuring the flow of goods around the affected area throughout this conflict, with border crossings reportedly being possible through rail transport across Moldova and the Port of Galati, or through Romania which provides port access. Trans-Caspian routes are expected to play a key role.
Furthermore, the meeting also asked FIATA members to be aware of the sanctions imposed by certain countries in response to the conflict, and ensure that they consult the relevant government pages regularly.
Currently, countries imposing related sanctions include, inter alia: Australia, European Union, the United Kingdom, and the United States. It is understood that further sanctions are under contemplation.