Why Freights Are High During Russia-Ukraine War China-to-Europe rates have increased by 80 percent

Situation Impacting The Freight Prices 

The Russian invasion of Ukraine has become a full-blown war, and it is putting pressure on the world of logistics. To combat the sanctions imposed by the Western world on Russia, they are cutting off shipping routes. As a result, it is forcing logistic firms to suspend their services. As a result, air and sea freight prices are skyrocketing.

Russia’s cutting off the sea routes for shipping has caused vessels to build up, waiting to move in and out of the Sea of Azov. Since 70 percent of Ukraine’s trade is done via ship, the congestion is worsening, adding to that the missile attacks on Ukraine have also moved to the Kerch straight damaging vessels.

Freight operators are not closing all commercial shipping in the area because the region has become dangerous and unpassable.

There are also reports of seafarers of all nationalities getting killed, injured, and trapped in the ships berthed in ports. In addition, the Ukrainian ports of Mariupol and Odesa are under attack, and the cargos stuck in the ports cannot move.

Also, with 14,5 percent of the global shipping crew coming from Russia and Ukraine, being stranded is putting immense pressure on the freight workforce.

 Why Is The Price Moving Up?

According to reports, the war has removed 10 million air space from international freight routes. As a result, the limited airspace and only 20 percent of cargo the capacity to distribute is decreased dramatically. Adding to this, airlines are now avoiding Russian airspace and looking for alternate and longer routes, causing an increase in fuel usage. Already there is backlog and delays with the consignments, the transportation of consignments is reaching record highs.

The oil prices have already been spiking for the last few weeks, and as per reports, the China-to-Europe rates have increased by 80 percent in late February after the war started. So carriers are now also imposing war risk surcharges.

Some insurance companies also increase their premium for the goods moving through the Black Sea.

Moreover, with 62 percent of the total ocean freight capacity that services Russia is suspended, the containers are stuck.

It is essential that seafarers can join and disembark the shops for them to move freely from port to port but with the war and the seafarers stuck and the fear of their safety is adding pressure to the price.

Moreover, after the Ruble devaluation and SWIFT cut Russia out of the international banking system, the unpaid freight bills led to the ships being stuck in the ports. i

The limited number of containers, the increase in crude oil, the restricted airspace are adding pressure in the logistics industry.

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