NEW YORK: Importers from London to Warsaw will soon face higher shipping costs, longer delays and an obstacle course of sanctions to navigate as Russia’s widening assault on Ukraine complicates the movement of cargo between Europe and Asia.

       President Vladimir Putin’s invasion, and retaliatory steps designed to paralyse the Russian economy, are heaping new disruptions on supply chains that never recovered from unprecedented shocks caused by the pandemic.

       Beyond the devastating human toll, the war threatens higher costs for fuel, grain, industrial metals, and other raw materials used in Asian-made consumer goods headed for Europe and beyond.

       Mediterranean Shipping Co and A.P. Moller-Maersk A/S, the world’s biggest container carriers, on Tuesday halted bookings for Russian freight, with Maersk seeing “ripple effects” and “significant delays” across the region.

       Not a good signal for European economies already facing energy spikes, product shortages, clogged ports and the highest inflation since the inception of the common currency more than two decades ago.

       “There is still substantial disruption in the supply chain,” said Jennifer Hillman, a Georgetown University professor and a former United States trade official. “There is an effort to build resilience but that will take time. With Russia invading Ukraine, we don’t have time.”

       Aside from their commodity exports, Russia and Ukraine aren’t big global traders. Russia is the world’s 16th-largest goods exporter, led by petroleum, coal and gas. Ukraine ranks 48th, led by shipments of grain and iron ore, according to 2020 data from the World Trade Organisation.

       But they are situated along one of the world’s oldest trade lanes, one that China has sought to use for its Belt-and-Road initiative and a route where much of the airspace is now restricted. Meanwhile, container ships can’t access Ukrainian ports and many are trying to avoid Russia’s.

       Currently, there’s little if any spare ocean freight capacity to move globally traded goods to absorb even an isolated, regional shock, said Jan Hoffmann, the head of trade logistics at the United Nations Conference on Trade and Development.

       “There is no slack in the system so anything that holds up ships anywhere will lead to less capacity,” Hoffmann said.

       For cargo between Asia to Europe, that leaves Russia’s rail network – behind only the US and China with its 87,000 kilometers of track – as another possible option.

       Both Maersk and DB Schenker, the logistics unit of German national railway operator Deutsche Bahn, offer intermodal services – by sea from Asia, then on Russian rail lines to Europe – but even those are coming under new restrictions and sanctions concerns.

       “Shying away from sanctions is a key risk,” said Peter Sand, a chief analyst at Oslo-based Xeneta, a freight market-analytics platform.

       “That means higher prices for bulk shipping, which will make it more expensive to trade and ship around the world.” — Bloomberg