How the Russia-Ukraine War Takes a Toll on Logistics

How the Russia-Ukraine War Takes a Toll on Logistics

Background issue:

With Russia showing no signs of cease fire, various countries have sought to block their airspaces from Russian aircrafts whilst imposing economic sanctions. In fact, The US Bureau of Industry and Security (BIS) have also implemented a Temporary Denial Order on Russian aircrafts such as Aviastar, Aeroflot, Azur Air, and UTair, in an attempt to prevent Russian access to U.S. exports, U.S.-origin items, and items manufactured abroad enlisted under the Export Administration Regulations (EAR) (Drye et al., 2022). In response, Russia declared an airspace closure for 36 countries and threatened to cut gas supply to “unfriendly” foreign countries (Deutsche Welle, 2022; Race, 2022).


  1. Circuitous routes for air freight

Carriers were forced to divert to longer routes to avoid closed airspaces as well as Ukraine territories for safety reasons. Some airlines also canceled flights because of the additional transit times. For instance, Finnair has canceled both its passenger and cargo-only flights to many Asian Countries – where routes involve crossing Russian airspaces‌ (Kulisch, 2022). The unavailability of the direct route via Russia’s Siberian air corridor prolongs flight duration between the UK and Asia. Flight bans are estimated to affect over a fifth of air freight too (Chee, 2022).

Despite the repercussions, the International Air Transport Association (IATA) predicts air freight to be minimally striked as Russia summed up to solely 0.6% of global air cargo in 2021 (Air Technology, 2022). Similarly, Neel Jones Shah, a former cargo chief at Delta Air Lines, claimed that carriers flying from Europe can still find alternative routes to Asia (Kulisch, 2022).

  1. Freight Charges Soar

The constant need to transport commodities and colossal amounts of goods meant that the supply of freight can no longer keep up with demands. According to Dylan Alperin, a supply chain industry expert at Keelvar, the skyrocketing number of carriers that have suspended services in Russia summed up to about 62% of total ocean freight capacity (Tan, 2022). Similarly, he also stated that tanker rates have soared from 157% to 591%.

Intense competition of freight spaces is then topped with the spike in oil prices, attributed to sanctions imposed on Russia – the third largest manufacturer of crude oil worldwide (Bowler, Horton and Palumbo, 2022). In fact, the EU used to be the largest beneficiary of Russia’s crude oil; as it took up about half of Russia’s oil export (Bowler, Horton and Palumbo, 2022). Ever since sanctions were put in place, oil prices hit the highest record in 14 years, reaching $139 per barrel at one point (BBC, 2022).

Both the decreased freight capacity coupled with the increase of oil prices have led to freight charges higher than ever before.

  1. Shortage of shipping crews

As stated in the Seafarer Workforce Report published by BIMCO and ICS, Ukrainian and Russian seafarers represent 14.5% of the global shipping workforce (SAFETY4SEA, 2022). As flight cancellation occurs frequently, trade levels could not be maintained. As a result, it is very difficult to do crew changes – where seafarers embark and disembark from vessels (Tan, 2022) . In addition, constant military strikes occurring in the war zones also raised security concerns, pushing shipowners to suspend ships heading to Russia and Ukraine to avoid paying higher insurance premiums (Tan, 2022) . Followed by Russian ruble’s plunging values amidst waves of sanctions, various Russian enterprises failed to cover up costs for commodities in ships, causing abandoned shipments and overdue debts for freight expenses (Tan, 2022).


Airport Technology (2022). IATA predicts negative impact of Ukraine conflict on air cargo. [online] Airport Technology. Available at: [Accessed 12 May 2022].

‌BBC (2022). Ukraine conflict: Petrol at fresh record as oil and gas prices soar. [online] BBC News. Available at: [Accessed 12 May 2022].

Chee FY (2022) EU in talks with U.S. on possibly expanding airspace ban for Russian carriers. Reuters, Thomson Reuters. Available from: (accessed 12 May 2022).

Deutsche Welle (2022). Russia retaliates with airspace closure for 36 countries | DW | 28.02.2022. [online] DW.COM. Available at: [Accessed 12 May 2022].

Drye, K., LLP, W., Kuelzow, J. and Slack, R. (2022). U.S. Imposes Temporary Denial Orders On Three Major Russian Airlines | JD Supra. [online] JD Supra. Available at: [Accessed 12 May 2022].

‌Horton, J., Palumbo, D. and Bowler, T. (2022). How reliant is the world on Russia for oil and gas? [online] BBC News. Available at: [Accessed 12 May 2022].

‌Kulisch, E. (2022). Ukraine crisis creates logistics headaches for air cargo, airlines. [online] FreightWaves. Available at: [Accessed 12 May 2022].

‌Race, M. (2022). Ukraine war: Russia threatens to stop supplying gas if not paid in roubles. [online] BBC News. Available at: [Accessed 12 May 2022].

‌SAFETY4SEA. (2022). ICS: Supply chain issues to take a hit by Lack of Ukrainian and Russian seafarers. [online] Available at: [Accessed 12 May 2022].

‌Tan, W. (2022). How the Russia-Ukraine war is worsening shipping snarls and pushing up freight rates. [online] CNBC. Available at: [Accessed 12 May 2022].

Call Us