How the Ukraine dispute affects the international shipping fee Jesse N. April 6, 2022
How the Ukraine dispute affects the international shipping fee

The ongoing conflict between Russia and Ukraine is affecting many problems of human life in countries all over the world. This dispute is threatening to change the global status quo and set the world back a few decades, especially when the world has just emerged from the ravages of the pandemic. Trade has many disadvantages, that’s why the shipping fee is suffering, specifically the increasing shipping fee.

 In this article, we cover the specific implications of the Ukraine dispute over shipping fees.

Overview of the Ukraine dispute

The conflict between Russia and Ukraine has taken place and affected many aspects of life. In addition to political and military tensions, the difficulties faced by businesses in global trade are greater than ever. Prices have risen but wages have not, along with the pressure of ever-greater costs that seem to drain the world. Having just recovered from the pandemic, this conflict is now a major blow to the global economy and trade, leading to serious consequences. One of them is the high shipping fee.

Overview of the Ukraine dispute

How the Ukraine dispute affects the international shipping fee 

Gasoline prices soar

The dispute has caused gas prices in many countries to skyrocket, with road carriers facing skyrocketing shipping fees as vehicles need gas to move and deliver. Gas prices have increased, and gas-powered vehicles such as containers, trucks, cars, motorbikes… have to spend more money to fill up gas for their work. These costs are also included in the shipping fee, which is the reason for the higher shipping fees than before.

How the Ukraine dispute affects the international shipping fee 

The high price of raw materials

The high shipping fee is also due to the high price of raw materials. Products that used to be easily circulated and traded are now more difficult to buy due to border closures and water transportation difficulties due to disputes. In order to produce such products, manufacturers had to bear a large shipping fee from transport companies, so they were forced to increase product prices. An increase in product prices means more shipping costs for consumers because shipping fees are often tied to the value and volume of the product.

The high price of raw materials causes increasing shipping fee

High labor cost

International shipping fees may also be high due to higher labor costs. There is a shortage of human resources in the production and transportation stages so they require a higher salary. Concerns about the safety of the crew and rising insurance premiums when sending ships to Ukraine or Russia also discourage ship owners from accepting shipments to these two countries. Therefore, the pay for seafarers also needs to be considered when asking for higher wages. Shipping companies around the world have to pay higher wages to their shipping staff due to a shortage of workers, so international shipping fees are on the rise.

High labor cost

Conclusion

The past few days have been an emotional roller coaster ride for the world. With the wounds of the pandemic just beginning to heal, many organizations feel confused and overwhelmed by the multifaceted consequences of this war for their operations as a whole, as well as their maritime sector. In such complicated times, every aspect of life is difficult and shipping fees, even a small factor, are equally affected by other factors. Contact us to get more information.

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