The Russia-Ukraine conflict has spread over the years, mainly affecting these countries and their neighbors. But since the past February 24th, the eyes of the world have been on this region of the world following Russia's invasion of Ukraine, an event that has drawn the condemnation of the international community and several countries have imposed many commercial sanctions and export controls against Russia, Belarus and the Ukrainian regions of Crimea, Donetsk and Luhansk.

This has triggered a lot of disruptions in the world economy (which has been rising from the COVID-19 effect). As part of the sanctions package, many shipping lines, airlines and logistics operators have suspended their routes, in addition to the insecurity that exists when crossing the Sea of Azov, the Black Sea and the airspace between Russia and Ukraine.

Digging a little deeper into this issue, we find that the main shipping lines such as: CMA CGM, Maersk, Hapag Lloyd and MSC have suspended all operations to and from the affected territories. Additionally, an increase in the Bunker Adjustment Factor (BAF) is expected due to the rising price of oil, and the war surcharge being added to tariffs.

Air services are also suspended to and from the affected territories, and the European Union, the United States and Canada have banned Russian aircraft from transiting their airspace. This obviously has an impact on air fares and has repercussions on the transit time through the routes to be avoided.

From the above, we can expect increased transportation and logistics costs, supply chain disruptions, increased gas and electricity prices, raw material shortages, etc. However, it is hoped that the nations involved, and the World Organizations will find a diplomatic solution and achieve a cessation of the armed conflict, mainly in order to minimize the loss of lives and resume the path towards the recovery of the world economy.

By: Bárbara Lombardi