Drewry assesses Ukraine impact on shipping

The immediate impact of Russia’s invasion of Ukraine on the world economy and container shipping is thus far fairly small, but that could change quickly, notes maritime consultancy Drewry.

Drewry assesses impact of Ukraine invasion on container shipping

“While no-one knows how this story will play out in the long run, there were some immediately obvious consequences; oil prices jumped to a seven-year high of $100 per barrel hours after the invasion, stock markets around the world slumped with Russian stocks falling particularly sharply, while the rouble crashed to a record low. Commodity and energy prices surged,” Drewry said.

The fallout for international container shipping will likely take longer to materialise and the immediate operational threat is relatively low outside of the locality. Retaliatory cyber-attacks that might affect shipping and fast-rising fuel costs are probably the main concerns right now.

Shipping will avoid the Black Sea for the foreseeable future (the Ukraine port of Odessa was closed shortly after the invasion and carriers notified customers that the country would not be called at for the time being), but in any case, there were only three inter-continental services (on the major trades that Drewry tracks) calling at ports in the region so disruption to international liner networks will not be catastrophic.

“However, the outlook for container shipping is intrinsically tied to the global economy and it is a near certainty that Putin’s gambit will lead to more economic volatility, heaping even more inflation on to people all over the world still reeling from the pandemic,” the briefing not continued.

“These are dark times for everyone that will only add more disruption and uncertainty to the world economy and trade. The risks look to be heavily weighted to the downside,” it concluded.