Chronicle of raw materials

Ukraine-Russia: the big logistical breakdown

Audio 01:42

Insurers have raised the cost of covering merchant ships crossing the Black Sea, adding to soaring freight rates across the region for ships still ready to sail after Russia invaded Ukraine.

(Illustrative image) REUTERS - Amr Abdallah Dalsh

By: Marie-Pierre Olphand Follow

2 mins

The freezing of maritime traffic in the Black Sea affects the exports of several raw materials produced in Ukraine, and increasingly in Russia.

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The equation is becoming increasingly difficult to solve for those who trade with Russia and Ukraine by sea.

Rare are indeed the ships available to approach the war zone, in the Black Sea and when they are, the insurance premium they impose is totally dissuasive: it can amount to several hundred dollars per container. .

In view of their profits last year, large shipowners have nothing to gain by taking risks by chartering ships, explains Marc Pauchet, analyst at Maesrk Broker.

► To read also: War in Ukraine: what consequences for maritime transport?

Export of grain and Ukrainian iron ore stopped

Port exit capacities are now at a standstill in Ukraine, and have pushed companies one by one to no longer serve ports under Russian control.

Several are now also excluding Russia from their rotations for political reasons.

This is particularly the case of Maersk which stops its stopovers in Saint Petersburg, and Kaliningrad in particular.

The traffic in the Black Sea represents 1% of the world trade in container ships, in other words, not much, but at the sub-regional level and for the partners of Ukraine and Russia, the impact is immense. : cereals no longer leave the port of Odessa, iron ore can no longer pass through the port of Yuzhne.

Tomorrow the costs of maritime transport could compromise the Turkish and Romanian stopovers on the Black Sea towards which some ships are now diverted.

► To read also: Ukraine, the cereal risk

Rail an alternative for Russia, but until when?

For now, Russia still seems to be finding ways to export coal, steel, aluminium, gas and oil via circuitous routes.

And thanks to rail, for certain raw materials destined for Asia.

But until when ?

Some Thai, Filipino or Japanese importers could give up buying Russian to avoid any disappointment in terms of money transfer.

The reorganization of supplies therefore seems inevitable, for many countries and in particular those of the African continent, importers of agricultural raw materials, which will be like others the collateral victims of port blockages in Ukraine and Russia.

The main unknown remains to this day, China's ability to absorb unsold Russian raw materials recalls Yann Alix, maritime transport expert for the Sefacil Foundation, and the position of the main Chinese shipowner Cosco - 4th in the world - which, for the moment, maintains the vagueness on its future maritime activities.

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