The logistics giant has stopped all goods shipments to and from Russia.
Empty Russian ports, some ships blocked in the Black Sea, no-fly zones over Russia, soaring fuel prices... There are so many repercussions of the war that are disrupting global goods transport. Active in the logistics sector for air, mari-time, rail and road transport, Swiss giant Kühne+Nagel is very cautious regarding its 2022 outlook after a record year in 2021. “Up until now, the outlooks were favourable,” said Detlef Trefzger, CEO of Kühne+Nagel, during a presentation of the compa-ny’s annual results on 2 March. “But Russia’s acts of war have highlighted the unpredictable nature of geopolitics, and it is too soon to analyse the subsequent effects on economic development.”
Like Danish group Maersk, the global leader in maritime freight, Kühne+Nagel announced it was suspending all operations in Ukraine, as well as transport to and from Russia, except for pharmaceutical, medical and humanitarian products. Kühne+Nagel did not provide exact numbers, but for its French competitor CMA CGM, for example, business in Russia, Ukraine and Belarus accounts for approximately 600,000 20 ft containers per year, or 2% of its annual revenue.
And the consequences extend far beyond country borders. “The closure of airspace above Russia and Ukraine and the ban on Russian planes over North American and European airspace have led to capacity restrictions and longer delivery delays. Some long-haul flights, particularly in the Eurasian hemisphere, now take three hours longer than usual,” said Kühne+Nagel. The company also had to close reservations for rail transport (Eurasia Express) to and from Europe, as these trains pass through the Russian Federation.
As for maritime transport, the war in Ukraine could create workforce shortages, said the International Chamber of Shipping (ICS) on 11 March. The ICS represents 80% of the global shipping fleet. Indeed, 14.5% of merchant seamen, or 1.89 million people worldwide, are Ukrainian or Russian. Some of these professionals are stuck in their respective countries and can no longer work. This slows the global economy, as 90% of goods are transported by sea. For the time being, however, the crisis has not yet resulted in higher shipping prices. According to the Freightos Baltic index, the average price to transport a 20 ft container on the main maritime routes is now $9,300. That’s six times higher than in 2020, but the same price as in January 2022.