Shipping liners have stopped booking export cargo destined for Russian and Ukrainian ports in the wake of the conflict between the two countries, officials said. Cruise liners have also announced the cancellation of port calls in Russia, they said.
Russia is the topmost destination for India’s engineering exports in the Commonwealth of Independent States (CIS) region.
Not only has action by shippers jeopardised exports which have been contracted but has also placed a question mark on future shipments.
“Many shipping liners stopped supplying containers and taking bookings for Russian ports due to geopolitical uncertainty. MSC, Maersk, Hapag-Llyod, which are leaders in global container shipping from eastern ports, have also stopped bookings,” West Bengal Custom House Agents' Society president Sujit Chakraborty told PTI.
Engineering products exporter Nipha Exports director Rakesh Shah said his company has a consignment for Russia but his liner Hapag-Llyod has stopped container booking due to the situation.
This ongoing Russia-Ukraine conflict may act as the most prominent deterrent in fulfilling the engineering exports target as the last quarter of a financial year, especially the month of March, usually sees a substantial jump in shipments, EEPC India chairman Mahesh Desai told PTI.
"If the strife continues for some more days, exports to Russia may not reach the expected level by the end of the fiscal," Mr. Desai said.
Engineering exports of India was recorded at $544.41 million in 2018-19 and then surged by 36% to reach an all-time high at #740.89 million in 2019-20. Hapag-Lloyd said the current situation in Ukraine and Russia has led to changes in the operational outlook for these countries.
The shipping liner also stated that it would advise customers over what would happen to cargoes already en route, but warned that terminal operations and inland transportation in Ukraine had stopped. Maersk, another container logistics company, said it has stopped accepting bookings to and from Ukraine until further notice.
However, the shipping liners are trying to provide relief to their customers for the disruptions. For instance, Maersk said it would like to offer relief packages such as free change of destination services subject to re-stowage and shifting cost, no cancellation fee on active bookings to and from Ukraine, interim stop of the detention and demurrage clock for containers in Ukraine until March 3.
Russia is India’s 25th largest trading partner with exports of $2.5 billion and imports of $6.9 billion in the first nine months of FY2022. Bilateral trade between India and Russia stood at $11.9 billion in 2021.
India ships out several items such as mobile phones, pharmaceuticals products and tea to Russia and imports crude oil, coal and diamonds. The country’s exports to Ukraine stood at $510 million last year, with pharma products accounting for 32% of it. Other export items include telecom instruments, iron and steel, agrochemicals and coffee etc.
The two-way trade between India and Ukraine was $3.1 billion in 2021. India imported goods worth $2.6 billion from Ukraine last year, $1.85 billion of which is vegetable oils, mainly sunflower oil.
Meanwhile, at least three cruise lines owned by Norwegian Cruise Line Holdings – Norwegian Cruise Line, Regent Seven Seas Cruises and Oceania Cruises – announced on Thursday that they would adjust their itineraries and remove calls to Russian ports in 2022, sources in a travel agents' body said.
Norwegian Cruise Line is removing planned stops in St. Petersburg from its 2022 sailings "due to the escalated situation between Russia and Ukraine". Sister brand Regent Seven Seas Cruises also plans to remove the Solovetsky Islands, Arkhangelsk, Murmansk and St. Petersburg, Russia, from its 2022 sailings, along with port of Odessa in Ukraine, they said.
