Because of the global pandemic, the transport and logistics sector faced many problems and challenges but it effectively learned to cope with them. However, Russia’s military aggression against Ukraine has created new difficulties. The European Union and other countries have reacted to the situation and imposed sanctions against both – Russia and Belarus. It significantly has changed the way logistics chains work. Logistics companies have to adapt and find new routes to provide freight forwarding.
To find out more about these changes and how they have affected the international cargo shipping companies, we met with Aleksandrs Poivoda, Vervo Auto logistics manager. He affirmed that there have been serious changes not only in the imported and exported products but also in other aspects, such as the fuel price, formalities, and others.
Sanctions against Russia
When the sanctions against Russia got imposed, import and cargo shipping to Russia crucially dropped. For a while, there was a very small number of cargo shipments and the prices for the imported cargoes plummeted. For now, the import and export shipments have become stable, however, they are still low.
As we, the EU, can no longer import products from Russia, the export prices from Latvia have risen. The fact that many companies are forced to leave the market has also contributed to the price increase. Companies from Russia and Belarus cannot operate in Europe anymore. And other businesses were forced to step out of the industry and stop their transporting services because of the high fuel prices.
One of the factors that strongly impacted the prices for cargo shipping was fuel prices. Vervo Auto explained that fuel is one of the most important aspects that sets the price for freight forwarding. It mostly has the largest share of the whole service price.
Products in demand
When A. Poļivuda was asked about the changes in the type and amount of the imported and exported products, he answered that a highly demanded product from Latvia now is timber. Previously, Russia was one of the most important providers of round wood. So the ban on product import from Russia has made it necessary to replace and find new timber suppliers. Additionally, the spring season and all the started construction work have increased the demand for wood production.
Another product that has seen an increase in demand is rolls of paper. Cargo shipments of paper rolls are being made more and more to Latvia and Estonia.
Aleksandrs revealed that one of the most interesting cargo shipments was transporting potatoes from Germany to Latvia.
Changes in routes
As Vervo Auto previously was operating and providing cargo shipping only in Europe, the routes that Vervo Auto chooses are not significantly changed.
What about the future?
In Aleksandr's opinion, we will not see changes in price either for fuel or cargo shipping. However, when the war in Ukraine will end, the country will have to recover from the damage and restore its cities, roads, and buildings. That could be a reason for a significant growth in the number of cargo shipments. They could increase even by ten times.
It is always important to look for new solutions, no matter how difficult the situation could seem. Cargo shipments are remaining to take place. Taking into account the imposed sanctions, bans on different products, and other factors, it is necessary to choose your partnerships accurately and look for new possible importing and exporting solutions. That will make your cargo shipments successful. With us, Vervo, you will always be able to find the most suitable solution – safe, easy, and effective.