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Russia-Ukraine Conflict

Tracking & Reporting Supply Chain Impacts Around the World

As the Russia-Ukraine conflict unfolds, disruptions across the supply chain will follow – from sourcing raw materials to delays at major ports, with global ripple effects. The following is an overview of how the region is tied to global trade, the impacts of sanctions and areas becoming unsafe, and analysis from supply chain experts. Check back for ongoing updates.

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Russia-Ukraine Conflict Tracker

JUL 18, 2022

The Latest Supply Chain Impacts

Volume Trends

  • Import volume into Ukraine has remained relatively stable over the past several weeks, with the 4-week average import volume across all transportation modes down 65% compared to the week of February 14 – 20. Shipment volume into Ukraine is up 254% compared to the low seen in late March, and down 4% month-over-month.
  • Import volume in Russia remains low compared to before the invasion, with the 4-week average import volume across all transportation modes down 92% compared to the week of February 14 – 20. Shipment volume into Russia is down 40% month-over-month as of July 17.

Ocean Dwell Times

  • FourKites has seen dwell times for exports in Europe decrease over the past several weeks, while import dwell times remain elevated in Europe. The 28-day average ocean dwell time for exports has decreased by 17% since the peak seen in mid-April, and is now down 10% since before the conflict began and down 3% month-over-month. Import dwell time is now at approximately 8 days, 28% higher than when the conflict began but down 3% month-over-month.
  • Dwell times for the Retail industry have remained high in Europe, with the 28-day average ocean dwell time 10% higher than before the conflict began but down 3% month-over-month.
  • For CPG and F&B, dwell times are 11% lower than before the conflict began and down 2% month-over-month. For Manufacturing industries (including Chemicals, Oil & Gas), ocean dwell times are up 8% from when the conflict began and are up 6% month-over-month.

Delays

  • LTL delays to Eastern Europe have decreased over the past few weeks, with the percentage of LTL shipments delayed now 15% higher than when the conflict began. This is down 48% month-over-month compared to mid-June, when LTL delays were as much as 33% higher than when the conflict began.

JUL 18, 2022

What We’re Seeing

“Ukrainian carriers are going full throttle to export grain and revive the country’s economic growth,” comments Maciej Mackowiak, FourKites’ Director, Carrier Marketing, Europe, who is based in Poland. “We are already seeing a lot of congestion on the Polish/Ukraine border because, since mid-July, the European Union has allowed Ukrainian road transport companies to send shipments without permits.”

Mackowiak also points out that long delays remain for traffic from Europe going into Belarus and onward to Russia as border control officers in Poland check thoroughly for products covered by EU sanctions.

Deliveries to Russia July 18

Data as of Jul 18, 2022

Deliveries to Russia Declining

Deliveries to Ukraine July 18

Data as of Jul 18, 2022

Deliveries to Ukraine Declining

JUL 18, 2022

Increased Shipments to Countries Bordering Russia and Ukraine

  • Shipments to countries bordering Russia and/or Ukraine remain strong compared to the rest of Europe, where the 14-day average shipment volume is up 20% compared to February 21. Shipments to these countries have decreased more in the past week compared to the rest of Europe however, as the 14-day average delivery volume to these bordering countries decreased by 8% week-over-week.
  • Volume across the rest of Europe is up 3%, while shipment volume to Russia and Ukraine is down 89% in total compared to the week before the invasion began.
Russia-Ukraine Conflict Tracker
Russia-Ukraine Conflict Tracker

JUL 18, 2022

Increasing Ocean Dwell Times Across Europe

  • FourKites has seen the largest increases in ocean dwell time in Eastern and Northern Europe since the conflict began, with the 28-day average ocean dwell time increasing by 12% and 13% respectively compared to when the conflict began. Dwell times in Eastern Europe are down 2% month-over-month while dwell times in Northern Europe are up 6% month-over-month.
  • Southern Europe saw large increases in late April, but is now about even with levels seen prior to the conflict and are down 2% month-over-month. Ocean dwell time in Western Europe is now 6% higher than levels seen before the conflict, but is down 7% month-over-month.
Ocean Dwell Imports Exports July 18

Data as of JUL 18, 2022

Ocean Dwell Times in Europe Increasing for Exports & Imports

Ocean Dwell by Industry July 18

Data as of Jul 18, 2022

Increasing Ocean Dwell Times at European Ports

Ocean Dwell Rotterdam July 18

Data as of JUL 18, 2022

Increased Ocean Dwell Times at Rotterdam, Antwerpen, and Bremerhaven

Increase in Delayed LTL Shipments to Eastern Europe

Data as of Jul 18, 2022

Increase in Delayed LTL Shipments to Eastern Europe

Feb 28, 2022

Glenn Koepke discusses initial supply chain impacts and the key trends to watch as Russia’s war in Ukraine unfolds.

Expert Commentary on the Biggest Issues

What are the implications for ocean shipments?

“Already, ocean freight rates are increasing 3 to 4X. Two years ago, container rates for shipments from Shanghai to Rotterdam were less than $2,000 – as the conflict unfolded, spot container rates climbed to $13,000. More recently, some freight forwarders showed rates at $54,000. Prices will continue to be volatile.” – Glenn Koepke, GM of Network Collaboration

“Sanctions are already beginning to bite, creating significant problems where ships are inspected or impounded.” – Jochum Reuter, GM of EMEA

“We’re predicting a ripple effect as delays in Eastern Europe start to cause issues in ports in China and the US, already under pressure from COVID-19, weather events and other factors.” – Jochum Reuter, GM of EMEA

“The difference in transit times for over-the-road shipments versus intermodal is significant and transitioning would require concerted supply/demand planning efforts. Therefore, there will have to be a sustained increase in fuel surcharges in order for a meaningful shift to intermodal shipments to be worthwhile.” – Ryan Closser, Director of Project Management, Network Collaboration

What can companies do in response or in preparation for further disruption?

“Agility and resilience come with a cost. Today, I might single-source in China. Tomorrow, to be resilient, I should dual-source. Doing so is an added cost to a supply chain, but it ensures companies can endure any unexpected disruption.” – Raj Patel, VP of Industry Strategy, 3PLs

“In the face of uncertainty, I anticipate companies will scrutinize the number of SKUs they carry and consider rationalizing them to fewer products until supply and demand can stabilize.” – Raj Patel, VP of Industry Strategy, 3PLs

“Before COVID-19, a lot of CFOs were reluctant to take on high carrying costs. Now, especially in the midst of the Russia-Ukraine war, leaders have no choice because of the what-if scenario. They must also assess the network design of their supply chain: is it capable of handling a shift to more air freight? Are facilities optimally located based on consumer demand patterns? These are the types of conversations shippers are having with their 3PLs today.” – Raj Patel, VP of Industry Strategy, 3PLs

How does the conflict affect consumers?

“Broadly speaking, the situation is creating a trickle down impact. Consumers first saw the impact on gas prices but now there’s more of a silent creep taking place as the costs of raw materials and shortages impact prices in unexpected areas. For example, when you consider all the products that contain wheat, grocery bills are going to be impacted and even restaurants and fast food eateries will start passing along their increased costs soon — if they’re not already.” – Mark Delaney, VP of Industry Strategy, Retail & CPG

“As shipments slow and costs rise, US consumers will continue to notice empty shelves and high prices.” – Glenn Koepke, GM of Network Collaboration

“Higher prices at the pump, higher prices for materials, higher prices for groceries that we’re all experiencing –– they will come back down. But it’s going to be slower ramping down than it was ramping up.” – Mark Delaney, VP of Industry Strategy, Retail & CPG

“The amount of oil used in the manufacturing process is massive. If oil prices rise drastically, it could have far-reaching effects on operating costs, which are likely to be passed on to consumers.” – Todd Simms, VP of Industry Strategy, Manufacturing

“There are wild fluctuations in the prices of commodities like fuel and food and we predict significant price increases as the conflict continues.” – Jochum Reuter, GM of EMEA

“Consumers will likely see price impacts in the next month. To what extent, it’s hard to predict. Just because actual expenses vary does not always mean that consumer pricing will, too. Some companies will take advantage of the situation to increase pricing because they can message that it’s due to global events, even though the cause could be something else.” – Glenn Koepke, GM of Network Collaboration

What are the implications for over-the-road shipments?

“Sanctions and border controls will increase the need for paperwork, approvals and create significant delays for suppliers. A conservative estimate would see delays increasing by 4 to 6X.” – Glenn Koepke, GM of Network Collaboration

“Based on numbers from TLP in Poland, Polish carriers are responsible for 30% of truckloads in Europe and over 100,000 truck drivers in those companies are Ukrainian. Around 30,000 of them have asked for leave so they can go back to Ukraine to fight or to take care of their families. Some companies have lost 80% of their drivers. This will have a huge impact on trucking across Europe.” – Jochum Reuter, GM of EMEA

“The difference in transit times for over-the-road shipments versus intermodal is significant and transitioning would require concerted supply/demand planning efforts. Therefore, there will have to be a sustained increase in fuel surcharges in order for a meaningful shift to intermodal shipments to be worthwhile.” – Ryan Closser, Director of Project Management, Network Collaboration

How does the conflict affect different industries?

“Nearly a quarter of the world’s grain actually comes out of that area specifically, so think about the trickle-down effect that that could have on products and goods all the way down to the consumer level — things like bread.” – Mark Delaney, VP of Industry Strategy, Retail & CPG

“The pressure of passing on price increases became normal business practice with COVID-19 impacts – we’ll likely see similar pressures with the Ukraine-Russia war.” – Todd Simms, VP of Industry Strategy, Manufacturing

“Higher prices might not show up in shipping costs because customers have been conditioned to expect free delivery due to the Amazon effect. But while it may be hard to add those costs back, sellers can typically raise the prices of their products without much of a hit to demand. Even if the war in Ukraine resolves itself in the coming weeks, it could be months before those prices begin to normalize.” – Mark Delaney, VP of Industry Strategy, Retail & CPG

“It’s already a constrained market. If organizations don’t have a high level of maturity – if they’re not consciously competent, capable of making the right supply chain tradeoffs – then the knock-on effects of this conflict could be detrimental for some businesses. Especially those that are already stretched thin from the past two years.” – Todd Simms, VP of Industry Strategy, Manufacturing

“It’s possible that Western companies no longer shipping or selling into Russia will divert their products elsewhere, so shelves will fill up faster in the Americas and other regions. As of today, most of those goods are likely still sitting in Asia, waiting to hitch a ride elsewhere.” – Mark Delaney, VP of Industry Strategy, Retail & CPG

What other downstream impacts might we see?

“Regulatory compliance or voluntarily sourcing materials from pro-Ukraine countries will increase supply chain complexities.” – Todd Simms, VP of Industry Strategy, Manufacturing

“Russia is a major producer of several metals, including aluminum and copper. Sanctions and a halting trade will impact inbound supply chains and potentially slow efforts to increase production of equipment like chassis and containers. At the same time, demand for critical shipping equipment is growing.” – Glenn Koepke, GM of Network Collaboration

“For carriers and 3PLs, rising costs will be contained to the spot market in the short-term, but they will go up as the market needs more capacity in an environment where there’s already a shortage due to other disruptions. Net effect: demand will outstrip supply.” – Raj Patel, VP of Industry Strategy, 3PLs

“Fuel variability isn’t typically protected by contracts, so companies will have rising costs, but contracted rates allow customers to lock in freight transportation rates.” – Glenn Koepke, GM of Network Collaboration

News Coverage

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China’s Bet on Sending Its Exports Through Russia Hits Setback

China’s Bet on Sending Its Exports Through Russia Hits Setback

Global Supply Lines Brace for ‘Menacing’ Economic Storm to Widen

Global Supply Lines Brace for ‘Menacing’ Economic Storm to Widen

Insurance costs of shipping through Black Sea soar

Insurance costs of shipping through Black Sea soar

Global supply lines brace for ‘menacing’ economic storm to widen

Global supply lines brace for ‘menacing’ economic storm to widen

Within Days, Russia’s War on Ukraine Squeezes the Global Economy

Within Days, Russia’s War on Ukraine Squeezes the Global Economy

Car Parts, Chips, Sunflower Oil: War in Ukraine Threatens New Shortages

Car Parts, Chips, Sunflower Oil: War in Ukraine Threatens New Shortages

Port Delays Continue to Pile Up

Port Delays Continue to Pile Up

Russia's war on Ukraine could triple ocean shipping rates to $30,000 per container, expert says

Russia's war on Ukraine could triple ocean shipping rates to $30,000 per container, expert says

Glenn Koepke, Senior VP, FourKites: “In the wake of the crisis in Ukraine…”

Glenn Koepke, Senior VP, FourKites: “In the wake of the crisis in Ukraine…”

No surprise: Data shows major e-commerce slowdown in Russia, Ukraine

No surprise: Data shows major e-commerce slowdown in Russia, Ukraine

Within days, Russia's war on Ukraine squeezes the global economy

Within days, Russia's war on Ukraine squeezes the global economy

How the war in Ukraine will impact trucking and logistics

How the war in Ukraine will impact trucking and logistics

Blocked routes and supply chain problems as the conflict in Ukraine escalates

Blocked routes and supply chain problems as the conflict in Ukraine escalates

JCB, Burberry and Asos join widening corporate boycott of Russia

JCB, Burberry and Asos join widening corporate boycott of Russia

War in Ukraine will trigger product shortages and soaring costs, UK businesses told

War in Ukraine will trigger product shortages and soaring costs, UK businesses told

Logistics pros warn of business impact from Russia-Ukraine war

Logistics pros warn of business impact from Russia-Ukraine war

Ports, Trade Routes and Modes of Transportation

Facts Impacts

HOME-personas_Procurement

In the first six months of 2021, 336,500 TEUs were transported from China to the EU by rail, with the Ukraine/Belarus route representing a significant majority of those journeys. Most pass through the Malaszewicze Logistics Park in Poland which is already at full capacity.

Source: trans.info

60% of the total cargo movement on the international scale for Russia takes place through the sea. This includes almost 722 million MT (2016) cargo movement through international vessel calls. A staggering 67 thousand plus ship calls come through this busy network every year and the country’s shipping strength boasts over 2820 vessel registrations and 98,000 seafarers under them.

Source: Marine Insight 

HOME-value_Yard

Bookings to and from Odesa are suspended and “the floating cargo to Ukraine will be redirected to the ports of Constanza (Romania), Tripoli (Lebanon) or Piraeus (Greece).”

DB Schenker, the logistics unit of German national railway operator Deutsche Bahn, said all services to and from Ukraine are “halted for the time being,” while some freight in and out of Belarus and Russia were still operating.

Source: Bloomberg

icon-150x100-packagesPlaneFront-1

Russia has closed its airspace to airlines from 36 countries, including all 27 members of the European Union, in response Ukraine-related sanctions targeting its aviation sector.

Source: Reuters

Ports, Trade Routes & Modes of Transportation

Impacts

Delays
We’re likely to see an increasing number of shipments being rerouted to ocean carriers, which will exacerbate existing delays globally, including at US ports.

Rate Increases
Meanwhile, ocean shipping rates could double or triple. For perspective, two years ago container rates for shipments from Shanghai to Rotterdam were less than $2,000. Due to COVID-19 and other disruptions they increased to $10,000. As troops amassed at the borders, rates increased to $13,000 and spiked to $54,000 in some cases shortly after the invasion. Prices will continue to be volatile. In turn, shippers will shift some shipments to air with similar price increases and volatility to follow.

Inflated Prices
These trends will have a direct impact on consumers, with high prices and limited availability of goods persisting.

More Paperwork, Even More Delays
For over-the-road transportation we expect sanctions and border controls to increase the need for paperwork and approvals, which leads to delays for suppliers and the need for alternative routes. These delays are likely to cascade to the greater region and will add to kilometers driven, fuel costs and driver wait times. A conservative estimate would see delays increasing by 4 to 6X.

A Drastic Shift in Europe’s Supply Chain
If a full invasion and Russian takeover of Ukraine occurs, the long-term concern is that the borders to ship between Russia and Europe will drastically change. Today, the primary border for freight traffic is Poland and Belarus. A worst-case geographical border scenario now puts Russia bordering Slovakia, Hungary, Romania, and Moldova. This is meaningful due to the permits Russia institutes every year for non-Russian drivers to deliver freight in and out of the country.

Imports and Exports in the Russia-Ukraine Region

Facts Impacts

Russia’s Exports

According to OEC, the top exports of Russia are petroleum, coal and wheat. Russia exports mostly to these countries:

China Map Icon

China ($58.1B)

Netherlands Map Icon

Netherlands ($41.7B)

Belarus Map Icon

Belarus ($20.5B)

Germany Map Icon

Germany ($18.9B)

Italy map icon

Italy ($16.7B)

Russia’s Imports

The top imports of Russia are cars and vehicle parts, packaged medicaments, broadcasting equipment, and planes, helicopters, and/or spacecraft. Imports are mostly from:

China Map Icon

China ($47.1B)

Germany Map Icon

Germany ($30B)

Belarus Map Icon

Belarus ($13.4B)

United States ($9.21B)

Italy map icon

Italy ($8.79B)

Russia-Ukraine Conflict Tracker

Ukraine’s Resources

Ukraine has extremely rich and complementary mineral resources in high concentrations and close proximity to each other. The country has abundant reserves of coal, iron ore, natural gas, manganese, salt, oil, graphite, sulfur, kaolin, titanium, nickel, magnesium, timber, and mercury. Source: UkraineInvest

According to Wall Street Journal

  • Ukraine is home to 22 foreign companies like Leoni running 38 factories that make goods for the automotive industry, producing wire harnesses, electronics, seats and other products, according to UkraineInvest, a government body that promotes investment in the country.
  • U.S. semiconductor makers import neon gas, the chemical compound hexafluorocyclobutene, and palladium, which are used to make chips, almost entirely from Russia and Ukraine, according Techcet, a research group that analyzes dependency on critical materials used in manufacturing.

Imports and Exports in the Russia-Ukraine Region

Impacts

Raw Material Shortages
Russia is also a major producer of several metals, including aluminum and copper. Analysts at Gartner predict that the invasion will lead to “severe shortages”. As a result, “prices for those items will likely spike, thanks to both the shortages and behaviors such as irrational buying and protectionism. This will, in turn, impact manufacturing operations up- and downstream as much as raw material mining.”

Shipping Equipment Production can be Hindered
Not only might this hinder companies’ inbound supply chain, but it could slow efforts to increase production of chassis and containers at a time when demand for critical shipping equipment is simultaneously growing.

Disruptions to Aluminum Supply
Similarly, specialist machinery exported from the UK to Russia may be stopped by sanctions. If this machinery is used to process aluminum, the supply of that metal from Russia to Germany may be restricted. If Germany processes aluminum to make battery cases which are shipped to China, there may now be a delay here too.

Increases to Shipping Costs and Product Prices 
Increased pressure on shipping puts up the cost of shipping to China and so increases the price of products at the end of the supply chain. If China assembles batteries and ships them to the US, the cumulative effect of delays may end up delaying technology product launches by several months.

How the Industry Is Helping

As trans.info reported, the logistics industry is doing its bit to help provide humanitarian aid. There are reports from countless European countries regarding trucks that are being sent to the Ukrainian border with essential goods. Others are also rallying supply chain leaders.

Similarly, our teammates at NIC-place, a FourKites company, along with our partner Unterer Logistics, have organized free transports of relief supplies from numerous collection points throughout Europe to the EU-borders with Ukraine.

In this effort, both Unterer and NIC-place have donated 10,000€ to help pay for diesel, tolls and other transport-related costs. In addition, Unterer Logistics is providing its European network of assets for these transports, while NIC-place will provide live transport tracking from the points of collection to the individual destinations. This tracking will guarantee full transparency and visibility on where goods have been delivered, ensuring that donations successfully reach those in need.