Major ports in Europe are grappling with a warehousing and storage capacity crises due to Russia and Ukraine cargo pile up, a situation that has disrupted container shipping operations and thrown global value chains into disarray, the UN Conference on Trade and Development (UNCTAD) has said.
UNCTAD, in an assessment on the war in Ukraine and its effects on maritime trade logistics, reports that cargo destined for Russia and Ukraine is piling up at ports like Hamburg, Rotterdam, Constanta and Istanbul. The disruption has left shippers facing delays and an increase in detention and demurrage charges at ports. which affect
1) warehousing and storage capacity,
2)leading to increase in supply chain costs,
3)increase in consumer prices and unrelenting surge of inflation across the globe.
4) With the high container freight costs being passed on, consumer prices have increased by 1.6 percent. Global import price levels are expected to increase on average by 12 percent as a result of sustained freight rate increases.
The report finds that the war in the Ukraine is stifling trade and logistics of the country and the Black Sea region, increasing global vessel demand and the cost of shipping around the world. In effect, Ukraine’s trading partners now have to turn to other countries for the commodities they import due to disruptions in regional logistics, halting of port operations, destruction of important infrastructure, trade restrictions, increased insurance costs and higher fuel prices.
Russia and Ukraine account for 53 percent of global trade in sunflower oil and seeds and 27 percent of wheat. A total of 36 countries import more than 50 percent of their wheat from the two warring nations. Ukraine, which exported around 50 million tonnes of grain in 2021 and had projected a growth of three percent in global exports this year, has been forced to revise projections downward and expects exports to shrink by 3.2 percent. About 90 percent of Ukraine’s grain export capacity has been cut off by the Russian blockade of Odesa and other Black Sea ports.
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