Russia-Ukraine crisis to reshape supply chains, flatten world trade
The war in Ukraine is putting global supply chains to the test again. Even before the conflict began, supply chain frictions had only improved marginally from the pandemic. While container handling had picked up significantly in many regions, schedule reliability – the actual on-time performance of individual vessel arrivals in ports tracked by Sea-Intelligence – dropped to 30.9%, marking a new all-time low. In terms of shipping rates, there has been some relief in the spot market, but the shift to long term contracts has meant that higher container tariffs are now locked in. The share of Ukraine’s global goods imports and exports only amounts to 0.3% each, while Russia’s export share is 1.9% and its import share is 1.4%. However, although the share in world goods trade is small for both countries, they are crucial oil, gas and grains exporters and have close links to Baltic states and other Eastern European countries, namely Lithuania, Bulgaria, Finland, and Latvia.