Huge Russian merchant fleet, Russian sailors, face uncertain situation

Sanctions on the Russian-owned merchant fleet and/or sanctions on Russian commercial fleet crew could have a major effect on vessel availability over the next few months, according to Vivek Srivastava, senior trade analyst at VesselsValue.

Srivastra said that potentially 7.4% of the world’s tanker fleet would be at risk, as would 3.5% of the world’s LNG carrier fleet.

“With cripplingly weak utilization and freight rates afflicting both of those sectors for the past several months, in marked contrast to booming dry bulk carrier and containership sectors, sanctions on Russian shipping companies could remove some excess supply of ships from the openly competitive market without causing as large an upward movement in freight rates,” stated Srivastava in a report released late last week.

Shipbrokers Arrow suggested that the most exposed vessel class was the handysize sector, of which around 16% of trade either loads or discharges in Russia or Ukraine, 10% being just Black Sea. A third of the trade was coal, with the rest mainly split across grains, steel and fertilisers.

Meanwhile the International Chamber of Shipping (ICS) has warned of supply chain disruption should the free movement of Ukrainian and Russian seafarers be impeded (see separate story). The Seafarer Workforce Report, published in 2021 by BIMCO and ICS, reported that there were 1.89m seafarers currently operating more than 74,000 vessels in the global merchant fleet, and, of these, 198,123 (10.5%) of seafarers were Russian, while Ukraine accounted for 76,442 (4%). With all Ukrainian airports and ports closed, all crew movements have stopped.