SUPPLY CHAIN DISRUPTIONS
Global supply chains came under mounting stress as the Russian invasion of Ukraine intensified, with transport routes hitting obstacles ranging from financial sanctions and closed airspace to armies intent on cutting off the logistics of war.
At least three merchant ships were reportedly shelled, and insurers are either refusing to cover vessels sailing into the Black Sea or demanding huge premiums to do so. An Antonov-225, the world’s biggest cargo plane, was reportedly damaged or destroyed by Russian forces while it was under repair at an airfield near Kyiv.
Major export powers and foreign companies have started to pull back. South Korea said it will strengthen screening over export control approvals and ban shipments of strategic goods to Russia. FedEx and UPS suspende
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Meanwhile, Europe’s big ocean carriers have suspended orders for Ukrainian shipments and avoided the nation’s main ports, diverting cargo to other destinations. As of early Monday, just one of those container lines had stopped taking orders for freight in Russia:
- MSC said “stacking areas at hubs in the region are already very full and we expect the impact of the Ukraine situation to present additional challenges on top of existing global supply-chain disruptions.”
- Maersk said Ukraine-bound freight would be discharged in Port Said and Korfez, and shipments to and from Russia “currently remain available but are potentially subject to change as things develop.”
- CMA CGM said 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).”
- Hapag-Lloyd said last week it stopped taking orders for Ukraine cargo and a “temporary booking suspension” for shipments into and out of Russia.
As of Friday, 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.
Ukrainian Railways said its employees were exempt from military mobilization so that they could help “continue our freight transportation operations, servicing the needs of the Ukrainian economy.”
Cyber Attacks
Far from where the fighting is occurring, there were other kinds of disruptions. Four days before Russia’s invasion, Seattle-based Expeditors International — among the U.S.’s largest providers of global logistics — reported a cyberattack that it was working to resolve and in the meantime, its “systems may be unavailable.”
As of Sunday, the source of the intrusion was unclear, but the company with more than 350 locations across 100 countries said it was still working to address the situation. Its shares hit an 11-month low last week.
In Japan, Toyota said it is suspending output at all of its Japanese factories on Tuesday after disruptions reportedly tied to a cyber attack on a supplier.
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