Shipping traffic near Russian ports has fallen by a third since the country’s invasion of Ukraine, a sign of how sanctions and global companies’ withdrawal from Russia are hitting the country’s economy.

Vessel volumes have decreased by 30% near Russian ports since Western sanctions were imposed last month, according to project44, which provides data on supply chains.

Moreover, the number of Russian-owned vessels seeking jobs on Monday was triple that on Feb. 28, according to separate data from Windward. The rise indicates how foreign businesses are increasingly unwilling to deal with Russian-owned companies, the maritime data provider said.

The drop in activity near ports and among Russian ships comes after the U.S. and its allies have hit Russian businesses, officials and oligarchs with sanctions, and many Western companies have pulled back from the country.

Several large shipping companies, including the world’s biggest container-ship operators—A.P. Moller-Maersk A/S and Mediterranean Shipping Co.—have temporarily suspended services to Russian ports. The U.K. and some other countries have also closed their ports to Russian ships.

Sanctions mean that maritime companies and ports have to tread carefully when dealing with Russian shipping companies, analysts say.

“Companies looking to protect themselves from financial and regulatory risk exposure will have to look not only at the vessel flag, but also at its ownership structure and recent owner changes,” Windward said.

Still, project44 data on vessel volumes is volatile and some analysts and company officials caution that it is too early to judge whether there will be a major impact on global supply chains from this conflict.

Source: WSJ