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How the Ukraine conflict is influencing trade with China
The war in Ukraine led to major difficulties in the area of transportation. One of the first sanctions against Russia was to close airspace to Russian aircraft, and Russia responded by closing Russian airspace to most European aircraft. But it is not only air freight that is affected by the effects of the war; rail and sea freight are also affected.
After the EU decided to close airspace to all Russian aircraft, the Russian aviation authority responded by closing Russian airspace to Western airlines. Belarusian and Ukrainian airspace is also currently closed. As Russia is the largest country in the world in terms of surface area, this means that flight times are significantly longer for many routes. This also applies to flights between Europe and Asian countries such as China. This not only means that transportation takes longer, but also that it is more expensive.
In addition, the restriction on Russian aircraft means that an important proportion of cargo flights are no longer possible, as the Russian Volga-Dnepr Group still transported 110,000 tons of cargo to Europe and the USA last year. All aircraft in this group are currently not allowed to fly over EU countries or American airspace. Some cargo planes in this group are therefore stranded at German and other European airports. Most European airlines, such as Lufthansa Cargo, are unable to close this gap as they have already reached the limits of their capacity due to the coronavirus pandemic. It is possible that Arab airlines, such as Emirates or Qatar, will take over a large part, as they are not affected by the sanctions imposed by Russia and the EU and are allowed to fly everywhere.
The situation at European ports is somewhat more relaxed, but they too are already feeling the effects of the war, as trade with Russia has been halted and many shipping companies have suspended bookings for shipments to Russia. Trade with China is not expected to cause any major problems for sea freight, as the routes are far removed from the conflict.
Just a few days before the start of the war, a new freight train connection between Germany and China was put into operation. However, the so-called Iron Silk Road runs through Ukraine and all rail traffic is currently suspended there. In addition, many shipments passing through Russia or Belarus are being canceled or switched to sea freight, as overland transport is too risky and too prone to delays due to the war.
A serious forecast about the further development of the war and the resulting restrictions and difficulties is not possible. We therefore recommend that you keep an eye on the current situation and then make a decision. If you decide to work with Kaiserberg, we can provide you with offers for different types of transportation together with our experts from the logistics sector.
