Supply Chain Update

Following Chinese New Year we saw some easing of the Ocean Freight rates ex Asia to Europe.  This will likely change again following Russia’s invasion of Ukraine.  We are not, unfortunately, seeing any improvement in transit times or any lessening of congestions at EU ports.  While here in Ireland we have reached a Covid 19 milestone with the removal of most restrictions, the same cannot be said for all markets.  China continues to suffer lockdowns and closures due to Covid 19, with Hong Kong reporting record positive cases.  They continue to impose significant restrictions at the airport and ports.  We are working with a number of clients to assist them with shipping moved ex HKG to Shenzhen (SXZ).

Russia’s unwarranted and reprehensible invasion of neighbouring Ukraine has led to robust and immediate action against the country.  All Western airlines will avoid Russian Airspace, all Western flights into Russia have been cancelled.  Delays will be experienced as a result of airlines, ocean lines and road freight systems having to adjust to new regulations.

Airlines have started to introduce a “War Surcharge”. This could add approx. €0.20c per Kg to all shipments along with increased general rates. This surcharge currently applies to Asian origins or destinations at the moment.  Airlines are cancelling contracted rates to affected markets leading to higher costs across these areas.

The majority of banking systems in Russia have been removed from international access/operation.  It is unlikely that any cargo movements will happen between Russia and EU.

Fuel costs which had risen prior to Russian invasion have continued to increase and will have significant impact on local supply chains in the near future. 

Road freight operators who until now had avoided imposing fuel surcharges have no option but to levy them. Rates vary by haulier.

Unfortunately, while all of the above is happening, we are not seeing any major improvements. Driver shortages and congested ports are still causing delays.

An extended war in Ukraine will exacerbate things further and will cause more Supply Chain issues. As always we are here, along with your preferred forwarders, to help and guide you where and when needed.

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