Impact of the war in the Ukraine for Dutch businesses
22 March 2022
The war between Russia and the Ukraine has sadly been going on for a few weeks now. This war will have an impact on Europe as a whole. Dutch importers and exporters will also have to expect and manage changes, delays, and adjustments. Let us share our experiences so far, as well as our uncertainties.
Market forces as a result of the war
The markets involving Russia and the Ukraine are more or less at a standstill. Products and raw materials are now imported from other countries. The resulting shortages are causing product prices to rise.
The extreme surge of diesel prices is a problem too. Current petrol prices are skyrocketing. The price of diesel has even increased daily since the start of the war. At the time of writing, the increase is almost € 0.30 per litre.
This means carriers can no longer cover their costs. It has even led to road hauliers making interim adjustments to the diesel surcharge, which is usually determined on a monthly basis. This will have direct financial consequences for every shipping agent using road transport.
Rail transport to and from China unavailable for the time being
Ritra Cargo currently no longer offers rail transport to and from China. A conscious decision, because the safety of trains and goods cannot be guaranteed. This is because part of the New Silk Route travels through Russia, which makes the situation very unreliable at present.
We are not the only forwarders no longer offering rail transport under the current circumstances. The direct result is more pressure on other modalities. For example, cargo that would normally be transported by rail, amounting to 2.5% of the total from Asia, now have to be transported by air or sea.
Shifting our rail transport to sea freight will have a direct effect on the already limited availability on ships, which could further extend transit times for shipments from Asia. At this time the impact on the sea freight tariffs is still unclear. Will a war surcharge be applied at some point, or are there increases on the horizon? There is much uncertainty.
Sights on the port
The Port of Rotterdam has stated it has serious concerns about possible cyber attacks from Russia. For this reason, the port authority scaled up its security at the beginning of March. For example, external hackers have been enlisted to search for any weak areas.
And customs also has its hands full because of the extra actions required. By now, thousands of containers destined for Russia are stuck dockside. These containers cannot continue their journey due to sanctions and stricter measures.
This means customs will be confronted with a lot more administration than usual over the coming period, for which extra manpower is being used. Despite the extra staff, there will still be a detrimental effect on other activities. Delays to other customs tasks such as physical checks and clearing cannot be ruled out.
If your company is involved in business activities with Russia or surrounding countries, then consult the RVO website for the latest information.Other important news