Windward, which leverages artificial intelligence and machine learning to solve shipping complexes for clients, has been tracking the effects of the conflict across the global shipping ecosystem since the crisis began last Thursday. In a report Wednesday, the company said there had been a sharp decrease in transit activity in the Bosphorus strait (also known as the Strait of Istanbul), which connects to the Black Sea and the Sea of Azov where Ukraine gets its sea access, and a sudden spike in vessels changing their AIS (automatic identification system) transmitted destination from Ukrainian ports to Constanta, Romania, and to Istanbul, Turkey.
Russian and Ukrainian ports on the Black Sea are big export hubs for wheat, corn and crude oil. Russia is the world’s largest supplier of wheat and Ukraine accounts for around 12% of global wheat supply and about 16% of global corn exports, according to the US Department of Agriculture. Together, the two countries also account for 80% of sunflower oil, which is used in food processing.
According to the Windward report, insurers have raised costs by up to 5% to provide cover for merchant ships through the Black Sea, adding to the already high rates for transporting goods through the region and further affecting supply chain complexes hit by the pandemic.
Western sanctions on Russia have also taken a toll, massively increasing the risk to shipping companies and financial institutions that work with Russian entities, and sending shockwaves into trade finance, a global system of financing the import and export of goods. READ MORE
