Posted on May 5, 2022
Russia’s war in Ukraine is gumming up logistics across Europe, in unexpected places like a pop-up container yard that’s a 90-minute drive west of Copenhagen.
Maersk has a staging area in the Danish harbor town of Kalundborg for boxes loaded with Russian cargo that’s been targeted by sanctions and now needs to be inspected and rerouted to other buyers. (Bloomberg’s Morten Buttler visited the site — click here to watch his QuickTake video and read the full story.)
The stacks are also rising in the Port of Rotterdam — Europe’s busiest for container volume and a huge transport hub for energy and commodities like steel.
Russia accounted for about 13% of Rotterdam’s total throughput last year and about 8% of container handling. The port says the impact of the Russia’s isolation from global trade “has become noticeable in almost all sectors.”
“Although no one can predict how this will unfold, we expect that the developments in Ukraine and the seriously deteriorated relationship between Russia and many other countries will impact throughput volumes for the rest of the year as well,” Allard Castelein, CEO of the Port of Rotterdam Authority, said in a statement last week.
The Port of Antwerp reported throughput totaling 58.3 million metric tons in the first quarter, 1.5% less than the same period a year earlier.
The shipping strains may intensify. Consider what Dutch dockworkers did recently: They refused to unload a tanker carrying Russian diesel, as European states edge closer to penalizing Moscow’s energy exports. (Read the full story here.)
For European economies, the fallout is already there to be seen: A purchasing managers index for the euro region was at a 15-month low in April, according to final data published Monday.
French car sales slumped again in April as European manufacturers’ supply chains are hit by the fallout from the war in Ukraine.
Meanwhile, factories in Asia managed a fitful recovery last month that highlighted their economies’ resilience to the impact on global supply chains of China’s lockdowns and the conflict in Ukraine.
—Brendan Murray in London
Fuel on the Fire | Diesel prices are surging to the highest level on record as the global fuel-supply shortage hits American truckers, farmers and users in just about every sector of the U.S. economy. Retail diesel averaged $5.18 a gallon on Thursday, the highest in records going back to 2005, according to auto club AAA. Prices jumped in recent days amid record futures contracts and decades-low stockpiles, further squeezing consumers dealing with decades-high inflation. Russia’s invasion of Ukraine has tightened global supplies of the fuel and led to fierce competition for diesel produced on the U.S. Gulf Coast. (Click here for the full story.)
Today’s Must Reads
- Slower growth | China’s stringent lockdowns to curb Covid-19 infections are taking a significant toll on the economy and roiling global supply chains, with President Xi Jinping under pressure to deliver on pledges to support growth.
- Trade barometer | South Korea’s exports to China dropped in April, highlighting the impact that Covid-related lockdowns in Chinese cities are already having on supply chains around the region.
- Supply-side focus | Tangled global supply chains from China to Denmark are sparking re-examinations of things as macro as globalization itself and micro as trucking efficiency around American ports.
- More records | The port complex of Los Angeles and Long Beach, the nation’s busiest gateways for goods trade, will move unprecedented amounts of cargo in 2022, supported by a resilient consumer, according to the chiefs of the maritime hub.
- Plane view | Airbus secured an 18-month extension to key engine-supply contracts as it cranks up narrow-body plane production in a bid to consolidate its lead over Boeing coming out of the coronavirus crisis.
- Shopping local | Chipotle Mexican Grill is scouring the U.S. for packaging materials amid rising inflation and supply hiccups that are pushing it to consider sourcing more of what it buys domestically as freight costs continue to soar.
- Cat power | Caterpillar’s first-quarter profit topped analysts’ expectations as surging demand and higher prices for the company’s diggers, bulldozers and trucks offset the impact of rising costs for raw materials and ongoing supply-chain issues.
On the Bloomberg Terminal
- Rate week | A 50 basis-point rate hike at the Fed’s meeting this week has been assumed since Chairman Jerome Powell said explicitly it would be on the table. Now the latest wage data are already prompting markets to contemplate 75 points of more tightening in June, says Bloomberg Economics.
- Cyber damage | Expeditors International was forced to shut down its operating systems following a cyberattack on the company, which will have a significantly adverse effect on revenue over the near term, according to Bloomberg Intelligence, though this may be mitigated by strong freight demand and strained supply chains.
- Use the AHOY function to track global commodities trade flows.
- Click HERE for automated stories about supply chains.
- See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
- Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.