$23 billion in trade will be affected
According to an analysis by russel Group, Russia's annual exports to the UK are worth $23 billion (£17 billion), which will be disrupted by the closure of all UK ports to Russian vessels.
The analysis shows that of the $23 billion in total Russian-British trade, $18.6 billion (£14 billion) is for gemstones and jewellery, and nearly $1.9 billion (£1.4 billion) is for crude oil exports from Russia.
The analysis comes at a time when Transport Secretary Grant Shapps said in a letter to all British ports that Russian vessels are not allowed to sail to any British ports and that any vessel deemed to be owned, controlled, chartered or operated by anyone linked to Russia should be prohibited.
Port felixstowe
At the same time, further penalties are expected for Russian shipping companies.
Suki Basi, Managing Director of Russel Group, commented: "As the international community strengthens its response to the Russian-Ukrainian dispute through a series of economic sanctions, our analysis shows that global trade is now becoming more interconnected. ”
Trade disruptions and collection challenges
The various economic and political sanctions imposed by Western countries on Russia have been further intensified, as a result of which Russian banks will be obstructed in the banking system around the world, so there is uncertainty about obtaining payments from Russia, and it is prudent to export to Russia.
Bangladesh
The Association of Garment Manufacturers and Exporters (BGMEA) has required member factories to obtain assurances from buyers before shipping, and the move to restrict the use of SWIFT international payment systems by major Russian banks could prevent payments or collections.
Bangladesh's export trade with Russia is worth more than $1 billion, most of which is clothing, the country's main source of foreign exchange earnings. Clothing manufacturers fear that if Russian banks are removed from SWIFT, they will face serious difficulties in obtaining payments. In addition, exports have also stopped as major shipping lines cut their services to Russia.
BGMEA President Farukque Hassan: "I have warned exporters, 'think twice'. When they're stuck, don't ask for my help to get paid. I cannot provide any guarantees. However, Hassan said that if SWIFT blocks all Russian banks, BGMEA is also discussing other ways to pay for goods that have already been shipped. Siddiqur Rhaman, former president of BGMEA and exporter of Russian clothing, said garment manufacturers were closely monitoring the situation, with some buyers assured that if SWIFT blocked Russian banks, they would pay through other channels such as Italy.
Mohammad Ajmir Hossain Chowdhury, deputy general manager of MSC Bangladesh, said the route had stopped shipping containers from Chittagong to Destinations in Russia. "Some of the containers were filled with clothing and ready for shipment. But I had to stop their voyage," he added, adding that MSC would not accept cargo bookings from Chittagong to Russia for the time being.
India
In India, which is not expected to impose sanctions on Russia, industry watchers acknowledged that the crisis will "disrupt" the pace of container trade growth.
Since the second half of 2020, Container Volumes in India have picked up steadily, largely due to stronger-than-expected export demand. According to the latest data, the total throughput of the country's 12 major public ports soared by 22% from April to January (the first 10 months of the 2021-22 fiscal year) to 9.34 million TEUs.
But trade will be disrupted as all major shipping companies suspend services to and from Russia, as well as those that pass through the Baltic Sea, the Black Sea and the Russian Far East.
"In 2021, our trade with Ukraine and Russia is $3.1 billion and $11.9 billion, respectively," said Sanjay Bhatia, co-founder of digital freight forwarder Freightwalla. "The current tensions could put pressure on businesses in these countries and goods coming in and out of India." Bhatia said the crisis has added "another layer of complexity and uncertainty" to Indian shippers and freight forwarders who are already grappling with multiple supply chain challenges, including equipment availability and ship capacity. "Many trade groups have warned Indian exporters to reconsider the cargo they transport through the Black Sea route, while insurers are hesitant to cover damage or delays. In addition, there may be delays in shipments, complex payment methods and challenges in obtaining credit guarantees. ”
Thailand
Thailand's trade with Russia and Ukraine has exceeded $3 billion, which has now been suspended due to ongoing conflict. Thailand has commissioned its Fiscal Policy Office to assess the situation and predict the likely impact of the war on its economy and trade.
Sri Lanka
Russia and Ukraine are important import and export sources for heavily indebted Sri Lanka. The ongoing war has led to the suspension of imports and exports between the two countries, further deepening the island nation's foreign exchange reserves.
Singapore
During the war, Singapore's banks stopped trade financing for Russian raw materials, effectively suspending transportation between the two countries. Russia, which exported $2.55 billion worth of goods to Singapore in 2019 and imports of $624 million, is now uncertain.
Japan and South Korea
Japan and South Korea have also banned imports and exports to Russia and stopped shipping to Russia. Japanese giant Honda also announced a moratorium on exports of cars and motorcycles to Russia.
Shipping costs may rise
Import and export trade between Russia and many countries in Asia has stopped, raising serious concerns among major exporters that they could suffer significant losses in revenue. Global fuel oil prices rose in the wake of the war, and shipping industry insiders feared container freight rates could rise in the coming days and weeks. On the morning of March 2, international oil prices continued to rise sharply, and Brent crude oil stood at $110 per barrel intraday, a new high since July 2014.
Lars Jensen, CEO of Liner Shippic Maritime, explained on LinkedIn that companies such as Maersk, MSC, CMA CGM, Hapag-Lloyd and ONE have decided to abandon Russia, with the exception of medical devices and food bookings: "Essentially this is a way to mitigate risks in the wider supply chain, and the service to Russia is still running, but if it stops suddenly, All the containers already loaded on board will be trapped in major hubs in Europe and exacerbate congestion. ”
Dry bulk companies, including Klaveness, Lauritzen Bulkers and Norden, have also publicly stated that they will stop operating to Russia, as have many tanker companies.
Since Tuesday, liners MSC, Maersk and CMA CGM have temporarily suspended reservations in Russia, and yangming, one and Hapag-Lloyd have suspended reservations in Russia. According to Alphaliner, the six carriers control 62 percent of the world's capacity.
In container shipping, the transfer of goods destined for Russia and enhanced inspections of goods could exacerbate congestion and inefficiencies in European trade.
In tanker shipping, freight rates have risen sharply. As more shipowners refuse to load russian-exported crude and more importers abandon purchases, Ural crude is traded at a discount of $20 per barrel, while tanker owners who agree to carry cargo can charge much higher rates.
The Avra tankers, with a capacity of 750,000 barrels, have shipping costs of $130,000 a day on the route, up from $5,000 a day last week, Clarkson said.
Freight forwarders and shipping companies, exporters, importers and banks – must prepare for the rapid and complex sanctions imposed by the United States, the European Union, the United Kingdom and their allies after the outbreak of the Russo-Ukrainian War and the expansion of sanctions. A slightly worse pool during this tense period could face heavy penalties, including long-term blacklisting and serious reputational damage. The analysis believes that this is not a set of short-term sanctions requirements, because whether the war ends quickly or prolongs, the impact on global trade is likely to be long-term.
Logistics companies began to refuse operations to Russia
Seko Logistics said it had "stopped all cargo entering and leaving Russia," while DP-DHL recently announced that it had suspended its operations in Russia and would not accept cargo entering and leaving the country until further notice. DP-DHL said it would also suspend services to and from Ukraine.
According to sources, operators are expected to start cutting Russian services in view of the actual impact of European airspace on The closure of Russian flights.
However, other major freight forwarders have not followed the example of DP-DHL and Seko, with Kuehne+Nagel saying its office in the Russian Federation is still functioning, but adding: "Our trade control team and staff are closely following the progress of the implementation of sanctions by the United States, the European Union and certain countries." Kuehne+Nagel complies with applicable rules and regulations. If a transaction is associated with an individual or entity on the sanctions list, or if its content or destination would violate national sanctions, no transaction will be accepted.
The Bangladeshi vessel was hit by a missile
A Bangladeshi vessel moored in olvia, a port in the northern Black Sea of Ukraine, was reportedly hit by a missile, with casualties. It is reported that the ship is the MV Banglar Samriddhi, a bulk carrier built in 2018 registered in Bangladesh.
After the outbreak of the Russo-Ukrainian War, the risk to Ships and Seafarers in the Black Sea increased considerably.