Ukraine Conflict Doesn't Help Global Freight

Today is the last day of February. One of the most dreary months of the year. Days only get better from here on out.

Unfortunately the same can’t be said about the outlook for 2022. We already had worries about inflation and now the Ukraine saga doesn’t make things any better. At this rate, the 2020s are going to be as bad as the 1930s. Yikes.

If you get updates on the conflict in Ukraine, you might’ve seen Russia destroyed the world’s largest airplane. Based on unconfirmed reporting, the plane – named “Mriya”, or “Dream”, in Ukranian – had been stationed outside Kyiv for maintanence. During operation, the plane and others in the Antonov commercial fleet are typically used to shuttle around heavy lift equipment, such as power plants, outsized vehicles, aerospace components, and the like. Ukraine has announced it will rebuild the plane. The cost is projected to be around $5B but Kyiv has already said they will ask the Russian Federation to pay for the work.

Seeing pictures of the plane had me thinking about the conflict’s impact on global freight. How many planes of such size are there in the world? What does closing Ukrainian airspace mean for the shipping industry?

I came across this post from Flexport, one of the world’s largest shipping companies, and it seems to describe the impact quite well. Here’s what the piece says about routing:

“The most significant impact is the need for rerouting around the conflict zone, extending transit times, and increased carbon emissions”

“The reduced air corridor space will likely lead to slower flight times. Flexport’s analysis of flights on six key trade routes from Asia to Northern Europe shows that average flight times have increased by 3.4% (range 0.6% to 6.9%) in the five days to February 28 compared to the December 1 through February 22 period”

This is what was written about leftover freight capacity:

“Flexport’s analysis of flight data, shown on the map above, indicates that 10 of Antonov’s 15 jets, accounting for 47% of its 1,410 tons of firm-wide payload and including AN-225, last landed in Kiev, Ukraine. However, only four of those planes have flown in 2022. The remaining five, all AN-124 class with 150 tons capacity each, have landed in Europe or the U.S. in the three days leading up to Feb. 27. Antonov may nonetheless face challenges in maintenance of its equipment outside Ukraine should spare parts only be available in Ukraine”

“The 43 jets of the Volga-Dnepr Group (PERSONAL NOTE: Russian airlines), which includes AirBridgeCargo, features 27 Boeing and 11 Antonov jets. For Aeroflot, 82% of its fleet are Airbus or Boeing planes. The impact on global airfreight may be minimal given both airlines each represented less than 0.5% of global airfreight carried in 2019”

So general takeaway seems to be rerouting of deliveries is the biggest cost to the industry. You can add that to your list of greviences towards Vladimir Putin should your packages arrive late next month.

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