How the crisis between Ukraine and Russia could affect shipping
The impact of this crisis will probably be felt across many industries, and so it’s likely that the shipping industry will be one of the many affected.
The crisis between Russia and The Ukraine is no doubt going to have far-reaching effects that will have a global impact. The impact of this crisis will probably be felt across many industries, and so it’s likely that the shipping industry will be one of the many affected. Of course, in such an uncertain and ongoing situation we can’t fully predict what will happen, but as experts in this industry, we can outline what some of the most likely outcomes are, and we can reassure our customers that we will keep on top of all developments and do everything we can to ensure our services run as smoothly as possible.
The three main shipping markets likely to be affected
Shipping costs are likely to increase across the three major markets of tankers, dry bulk, and container shipping as the crisis impacts the industry in a variety of ways.
Oil and gas are the most likely commodities to be impacted by sanctions, as indeed fuel has historically been targeted for such sanctions. This would see shipping rates for tankers increase as supply cannot keep up with demand.
Dry Bulk Goods Shipping
It’s possible that military action could impact shipping in the Black Sea, which would have a knock-on effect on the transport of dry bulk goods as usual shipping routes are disrupted. It’s likely that shipping in this area will be hit by high war risk insurance premiums, which will increase the costs of shipping. This area is a large grain producer with large scale exportation, and these exports could well be affected by the conflict, pushing up grain prices worldwide.
Least likely to be affected is the container market, but there is still a possibility of delays due to congestion in ports and terminals, and routes having to change to avoid areas of conflict. Additionally, a cyberattack is also a possibility and that could potentially disrupt container shipping, and fuel cost rises will of course affect all transport for businesses and individuals.
The impact on crude and LNG and increasing fuel costs
It’s very likely that fuel costs are going to rise, and this of course will impact shipping with marine fuel following the price of crude. Geopolitical volatility in areas that export oil is always going to have a big impact on fuel prices as we’ve already seen. It’s likely that the rises we’ve seen so far are not the end of the price increases. This will have a knock-on effect on all transportation industries. Sanctions may see crude and LNG imports being rerouted, or sourced from alternative locations, all of this will add to the costs for the shipping companies.
We will keep all our customers informed
Again, we’d like to assure our customers that we will be closely watching the situation and keeping a close eye on anything that could affect our industry. If we feel our customers will be affected in any way, we’ll certainly keep you informed and updated. Our dedication to offering you a seamless and stress-free service, as ever, remains our highest priority.