With the long-term effects of the pandemic and current geopolitical events, it seems like the shipping industry can’t catch a break. While current United States sanctions against Russia, are in fact, having an impact on the general cost of shipping, the team at GFS Logistics would like to take a deeper look into how current sanctions are impacting our industry.
Here’s our insight on what sanctions are in place, what they mean for your shipping options, and how GFS Logistics can help your team save money on shipping costs.
What Are Sanctions?
Per the official definition of the term “Sanctions,” they are measures taken by countries to restrict trade and official contact with a country that has broken international law.
The recent Russian invasion of Ukraine was deemed by the majority of the world as an egregious action against international law. As a result, the United States and other nations issued sanctions against Russia, sending an economic message that created ripples throughout the global and local economies.
How Have Current Sanctions Impacted the Shipping Industry?
In general, all shipping sectors have begun to face negative impacts after the implementation of the latest sanctions. From commodity traders to bulk gas imports, the impact on our industry is profound and will surely increase over time as the situation in Europe unfolds.
Here are some insights under our microscope that are creating issues for shipping companies and brands alike.
Further Congestion and Delivery Delays
As international shippers are forced to change courses while sanctions are in place, this naturally leads to congested ports and delivery delays.
So, if a brand needs to ship products internationally, without a trusted logistics partner on its side, it’s difficult to make the right financial decisions or even get products on a shipping boat that will mitigate the risk of getting product stuck at a port and missing critical deadlines.
Shipping Companies Are At Extreme Financial Risk
When sanctions occur everything associated with the sanctioned country is under strict review. Therefore, shipping companies could follow new shipping regulations to the “T” but still face penalties if they make payments to employees through sanctioned banks or pay for services and supplies from ports they don’t know are owned by the sanctioned nation.
The Need for New International Contracts
As sanctions prevent all local shippers from fulfilling contracts that involve shipping to or even working with a sanctioned nation, new contracts will need to be drafted on behalf of shipping companies.
Although new international contracts will eventually smooth out the issues that sanctions have created, the downtime between contract drafting, review, and ultimate approval means that space on eligible shipping carriers is scarce and brands could face even higher shipping costs in this window of time.
Chart an Affordable Shipping Course Today, with GFS Logistics
The bottom line is that every result of the sanctions in place will culminate in higher shipping costs for brands that rely on meeting international shipping deadlines.
Relying on your own shipping methods could lead to price gauging, delayed deliveries, and the downfall of your brand’s reputation. With the help of GFS Logistics on your side, you have a professional logistics team on your side that has established relationships with reliable shippers from around the world.
Trust us to give you options for your shipping course that allows you to select a shipper that completely fits your budgetary and deadline requirements.
Contact us today to learn more about our services!