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Maersk, MSC Cutting Ocean Service to Russia

Several ocean carriers halted bookings to and from Russia on Tuesday as the attacks on Ukraine continued and supply chain executives prepare for the impacts of the war on trade and shipping.

Uncertainty around the conflict and what it means to goods movement has been a topic of conversation this week in Long Beach as carriers, shippers and freight forwarders converged for IHS Markit’s annual TPM22 Conference, which is focused on the Trans-Pacific trade.

“I don’t think anyone in the world has any idea what’s going to happen,” said Gary Cohn, vice chair of IBM and the former economic advisor to Donald Trump, at the conference Monday.

Ocean Network Express (ONE) chief executive Jeremy Nixon is bracing for the worst, saying at the conference Tuesday, the situation is a difficult one.

The container shipping company found nearby countries have restricted the ability to transship Russian cargo, thus prompting the company’s decision Monday to stop taking bookings to and from Russia.

“We just wanted to avoid a very quick backup happening and a lot of issues happening, so we took early … action,” Nixon said. “Our expectation is that over the next week the sanctions will get tougher. The trading situation will get tougher.”

ONE’s decision was followed by additional shipping container companies announcing halts to servicing cargo bound for or leaving Russia.

Mediterranean Shipping Company and Maersk both confirmed a temporary halt on new bookings, excluding food and humanitarian aid.

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Maersk said it is “deeply concerned by how the crisis keeps escalating in Ukraine.”

The ocean carrier said the Ukraine-Russia situation is impacting the flow of goods, causing delays and creating unpredictability. Backups are now occurring due to inspections of exports to ensure compliance with sanctions.

“This exception is to underline that our company is focusing on social responsibility and making the efforts to support society despite all the complications and uncertainties within the current supply chain to/from Russia,” Maersk said in its customer alert Tuesday.

The ocean liner warned of a broader impact saying, “The delays are expected to have ripple effects across the regional ocean network, resulting in further delays and congestion.”

CMA CGM also confirmed a halt on new Russia bookings.

Ocean carriers had already suspended service to and out of Ukraine last Thursday after the Port of Odessa was closed following Russia’s attack.

“We have raised our alert levels and took preventative measures to protect our IT systems as well as your personal and company data,” CMA CMG said Tuesday.

Some industry watchers have warned of potential cyberattacks stemming from the Ukraine-Russia situation.

Seattle logistics company Expeditors International was hit with a cyberattack Feb. 20 and has since struggled to get its systems back up. A bright spot was noted in a Monday update on the matter when the company said it “is making progress in returning to normal operations.”

The company said it is handling shipments and services across most products and continues to expand the recovery of its systems.

Details on what systems were down and the origin of the attack remain unclear.