According to UNCTAD, the Ukraine-Russia conflict might cause 1.5 million containers moved by rail between Asia and Europe to be diverted to ocean shipping, driving up freight charges even more.
Russia and Ukraine form a significant component of the Eurasian Land Bridge, according to a UNCTAD research on the impact of the war in Ukraine on trade and development. Both land and air cargo transfers between Asia and Europe are affected by Russian airspace restrictions, contractor uncertainty, and security concerns. While Russian airspace remains closed to 36 nations and vice versa, some freight forwarders advise that overland shipments between Asia and Europe be avoided for the time being.
Over the last two years of the pandemic and resulting global supply chain disruption shippers have increasingly turned to rail, air, and even trucking, from China to Europe to beat congestion on the ocean shipping trade between Asia and Europe that has driven freight rates to record levels, and dramatically reduced service reliability. About 1.5 million containers were moved by rail west from China to Europe in 2021. If the current volumes moving by rail are added to the Asia – Europe ocean freight demand, this would mean a 5 to 8% increase in an already congested sea trade routes.
