Effects of the Russia-Ukraine conflict on transport sector

The cases

The impact of the Russia-Ukraine conflict on Italian companies also affects the logistics and transport sector.

In our last article, we spoke about the main effects on our companies, but the consequences of war are even more evident, also in the transport sector. Many difficulties arise from the lack of raw materials due to the closure of Ukrainian ports. 

In particular, the Ukraine port of Mariupol has ceased operations compromising the productivity of Italian factories and steel mills. Italy’s imports from Ukraine of steel amounted to 2.82 million tons of products in 2021 - according to Siderweb data -, with an increase of over 20% compared to 2020; of which 91% are raw materials and semi-finished products. The situation has been aggravated by the attack on the Azovstal steel center of Mariupol, one of the biggest steel supplier for many Italian and Friulian companies. 

In March, the last steel slabs cargo arrived from Mariupol at the port of Monfalcone; considering the supply interruption, once the stocks are exhausted, the Italian companies will have to supply themselves with row materials from other areas, such as South America, developing new business relationships. 

Moreover, the International Chamber of Shipping (ICS) also highlights the problem of labor shortages in the global marine sector: Russian and Ukrainian seafarers make up almost 15% of seafarers. 

In addition to the supply interruption and difficulties faced by companies, many Italian companies also stopped their activities in Ukraine or in Russia. This occurs in steel sector, but also in agricultural sector, energy resources (oil and natural gas), and textiles, as well as in transport sector, interrupting production orders with the consequent decrease in turnover. The logistics and transport sector, already heavily penalized by the COVID-19 pandemic, which has caused a general increase in the prices (rise in the price of freight rates and increase in fuel prices), is facing further difficulties due to the Russia-Ukraine conflict, with inconveniences and uncertainties for both sea and road transport.