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are now returning items already in transit to the sender where possible.
Logistics Logistics companies such as DHL and DSV have all asked their Ukrainian employees to stay at home with their families and follow instructions from local authorities. Ukraine is an important air corridor for
European air traffi c and re-routings will lead to a – hopefully short-term – loss in capacity. Shipments of goods by sea are also being
impacted. There are no services into Ukraine’s key port, Odessa, and Ukraine says two foreign-owned commercial ships have been shelled there by Russian forces. Surface shipments are being re-routed via Romania, Lebanon and Greece. The container line Ocean Network Express (ONE) has now suspended container bookings to and from Russia, hours after Maersk said it was considering doing the same.
Rail freight Most major Europe-Asia rail freight services (some 95%) do not pass through Ukraine. Direct freight trains are entering Ukraine through its border with Poland, but these are largely war supplies. It is not just physical goods sales to Russia
that are being impacted. British, EU and US companies operating electronic services in Russia are seeing payments to them frozen after these countries removed selected Russian banks from the Swift messaging network and froze the assets of Russia’s central bank. Bank cards issued by VTB Group, Sovcombank, Novikombank, Promsvyazbank, and Otkritie are no longer working for Russian customers trying to pay for things such as Netfl ix subscriptions, or access pay services from Apple and Google.
E-commerce E-commerce has also been impacted. Etsy is waiving all fees owed by Ukrainian sellers, a sum of approximately $4m, and
eBay.com has announced it has suspended its Global Shipping Program service into Ukraine and Russia.
Looking beyond the immediate logistical
problems for deliveries, it is likely UK businesses will see an increase in costs because of a rise in diesel and petrol prices. Even though the UK is nowhere near as dependent on Russia for oil and gas as the
March 2022
EU, increased demand is pushing up prices everywhere. For example, diesel is now at 154.72p per litre, says the RAC. Food retailers are likely to see an increase in
prices. The Russia-Ukraine plains were once called ‘the breadbasket of Europe’. The area exports about a quarter of the world’s wheat and half of its sunfl ower products, such as seeds and oil. In addition, Ukraine sells a lot of corn
globally. Some analysts are predicting a doubling of global wheat prices.
Heavy industry Ukraine already has a very large heavy- industry base and is one of the largest refi ners of metallurgical products in Eastern Europe. It is also well-known for its production of
high-tech goods and transport products, such as aircraft. There are fi ve industries where the share
of Russian exports to the EU is signifi cant: textiles, pharmaceuticals, electrical equipment, machinery and transport equipment. Supply chains and costs could be impacted in all these sectors. UK car manufacturers such as Jaguar-Land
Rover have halted all deliveries to Russia, while Mini has had to suspend production for fi ve days because of the “ongoing parts supply situation, now including the confl ict in Ukraine”.
Ukraine has a very large heavy-industry base and is one of the largest refi ners of metallurgical products in Eastern Europe. It is also well-known for its production of high-tech goods and transport products, such as aircraft
www.CCRMagazine.com
Cost How much could all this cost UK businesses? It’s too early to tell but, during the far smaller Ukraine confl ict of 2014, a report by the Vienna Institute of International Economic Studies said Germany lost around £2.51bn (EUR 3 billion), followed by Italy, which lost around £1.17bn (EUR 1.4 billion). France, Great Britain and Poland each lost around £0.67bn (EUR 0.8bn). The current confl ict is on a far larger scale
and the economic sanctions imposed on Russia are far more severe, so expect these numbers to be the tip of the iceberg. In common with all other UK international courier service providers, we have currently suspended booking services to Ukraine. CCR
15 In Focus
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