Ukraine supplies 90% of U.S. neon needs, and 70% of the world’s supply, according to data from the United Nations Conference on Trade and Development (UNCTAD).

So far, the war has affected global manufacturing inputs.

And going forward, UNCTAD projects that the war’s impact on container shipping is likely to intensify.

For its part, the Russian Federation accounts for 40% of the world’s palladium production.

All of these elements are used as inputs in the manufacture of high-tech products such as semiconductors and ion batteries.

In addition, the war in Ukraine and the economic restrictions that come with it have affected the rail route between China and Europe.

In 2021, when shippers were forced to abandon congested ports and severely limited air cargo, they turned to the China-Europe rail network, where demand soared more than 30%, to nearly 1.5 million TEUs.

Ukraine

Cargo from China, Japan and the Republic of Korea using the Trans-Siberian route is hampered.

Meanwhile, new routes are emerging, such as the central corridor of the Trans-Caspian international shipping route.

The war is also transforming the global oil and gas landscape.

In May 2022, the European Union agreed to phase out seaborne oil imports from the Russian Federation by the end of 2022.

But diversifying Russian gas imports will not be easy, given logistical hurdles, pipeline capacity constraints and the need to negotiate contracts and develop new import facilities.

Continued dependence is evident in Europe’s purchase of Russian gas since the beginning of the war.

However, Europe is exploring options for floating regasification units and reviewing plans for proposed onshore LNG terminals in, for example, Germany, France, the Netherlands and Poland.

Meanwhile, the United States and India have already increased their shipments of petroleum products to Europe.

Logistics

The war has had limited impact on container shipping. However, nine of the top 10 global container lines have suspended operations in the region and other logistics companies have abandoned the Russian market.

In addition to undermining connectivity in Black Sea ports, the war has amplified port congestion in Europe and led to longer customs controls.

Cargo destined for the Russian Federation requires transshipment at northern European ports, which were already congested.