Amr Al-Samdouni — Secretary of the Transport and Logistics Division of the Chamber of Commerce — said that Russia’s offensive in Ukraine heralds a new global economic crisis in Europe and will also directly affect global growth, which is already suffering from the repercussions of the coronavirus pandemic.
He also said that the conflict may be severe for all countries of the world, considering that the two countries are the largest exporters of natural gas, as the EU obtains 41% of its needs from them, in addition to the fact that they export 17% of the world’s wheat, and that Europe alone imports about 55% of its gas and about 45% of its oil from Russia.
With Russia refraining from exporting, Europe will face a crisis in continuing development and operating its factories, and with the gas price increasing by 500% as a result of the war between Russia and Ukraine, the cost of transportation and products will rise, which will cause great damage to Europe.
Al-Samdouni explained that the Russian offensive in Ukraine contributed to the disruption of the global supply chain, which has not yet recovered from the negative effects of the pandemic, which added to the high costs and caused delays in shipments, along with other challenges faced by companies trying to transport goods around the world.
He also pointed out that the movement of shipping from the Black Sea is currently experiencing complications due to the war, which has led to the suspension of a number of shipping lines to and from Ukraine, and many logistics companies intend during the coming period to start searching for alternative markets to compensate for the lines being stopped. These alternatives are represented in several countries, including Romania, France, Brazil, and Argentina.
Al-Samdouny expects that the Black Sea will be classified as a high-risk area during the coming period, and this will likely lead to an increase in the insurance premiums required to ship goods or transport them through these waters, especially since it is not clear how long this change will last, and the more the conflict escalates and reaches a major war, the lines tend to impose risk fees that are charged to freight.
It is also expected that freight prices will rise during the next few days as a result of raising the value of insurance coverage on ships, tankers, and all their employees, especially those passing through the Black Sea, which actually witnessed a 5% increase before the war, in addition to the increase in oil prices.
Additionally, the prices of the most prominent raw materials are expected to rise globally due to the dominance of Russia and Ukraine in uranium, titanium, manganese, iron ore, mercury, coal, sunflower oil, barley, potatoes, and ammonia.
As for supplies such as wheat, due to the ongoing war, a state of competition will arise between importing countries over the available quantities of wheat, which will create a state of global conflict as a result of fears related to the Ukrainian-Russian crisis.
Al-Samdouny expects that Egyptian ports specialised in transit activity will witness a boom during the current period, especially since some shipping lines announced the start of trading Western European goods through Port Said’s ports temporarily.
Most container ships will carry out transport work from the Asian market, so that their last stations will be the ports of the eastern Mediterranean Sea, including the ports of Port Said and Damietta, which means that eastern Port Said Port has an opportunity to increase the volume of its trading due to the availability of submersibles of more than 18 metres, which enables the reception of major ships.