Market update – Shipping & supply chains

With nearly two years of pandemic disruption, shipping had started to move in the right direction. Just as things started to be improving, sanctions imposed on Russia now poses the threat of causing further disruption for shipping and at ports – especially here in Europe.

With countries across the world, including the UK, imposing sanctions against Russia and Russian exports, disruption has started to emerge at European ports which has the very real potential to worsen the already disrupted supply chains.

Shipping companies across the globe, including Maersk, are blocking Russian cargo. Furthermore, ships that had already left ports and on the water, with sanctions to be adhered to, will have to reroute or offload and store at ports. Therefore cargo, ships and containers are ultimately adding to an already disrupted shipping outlook of further port congestion and container issues.

With ports around Europe feeling the effects of the situation, one port that has experienced blockages in particular is Rotterdam. It is estimated that 15% of all cargo through Rotterdam is linked to Russia. Delays, blockages and bottlenecks are all problems that are likely to be seen in the coming weeks.

We don’t know how long the conflict, and sanctions are due to go on for, so the outlook for 2022 is unclear. However, further congestion at European ports is likely to get worse with containers and congestion at ports proving a real problem for our supply chains.

What does this mean for you? Lead times could remain extended or even get longer. A solution to this for businesses to plan further in advance and work with suppliers on stock holding and call off agreements to maximise stock buffers that are in place.

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