Russia accounts for 10.7% of EU road imports & 7.8% exports, this is a 10th of all imports in the EU. With such a large freight route now being disrupted, what can we expect to see changing across the supply chain? In the previous couple of weeks the conflict has spread like wildfire, leaving many freight routes inaccessible; either by sanctions or by conflict.
Mass amounts of cargo pass through Russia, to give an estimate in numbers, around 10,000 Twenty Foot Equivalent (abbreviated to TEU) on a weekly basis. With these routes now disrupted, freight forwarders must engage other methods of transport, according to sources this could mean an increase in China-EU imports & therefore a rise in sea freight. Although transporting via sea freight is a great alternative, due to mass demand this could prove difficult to handle especially due to an already scarce capacity at Chinese ports especially after the previous couple of years with COVID effecting the supply chain.
You may be scratching your head and questioning “why wouldn’t freight forwarders just opt for transporting cargo by air?” Well, it’s not quite that simple, due to Russian airspace being off limits for EU & American vessels, the space is a huge risk to any pilots attempting to carry cargo through. As well as Russian air space being completely off limits, this disruption will mean a much, much busier Asia-EU airspace & once again mean prices will rise, due to a higher demand.
In summary, limitations are rising due to the conflict but along with these limitations rising, so is demand & therefore prices. The supply chain never stops, there will always be demand & always be an alternative route, but that’s not to say it will be an easy one.
Keep checking our website for more updates on the conflict and how it effects the supply chain, we’ll be updating regularly, but for now check out our other articles.
