Mar. 28, 2022
A combination of closed airspace, exorbitant fuel prices, and reduced export capacity amid an ongoing sanctions war have led to severe disruptions on the seafood market.
This bodes ill for Norway, for which seafood is a major source of income trailing only oil and gas.
As an unexpected consequence, Russia's special operation in Ukraine and ensuing wave of sanctions and countersanctions have
sparked massive problems for Norwegian seafood exports.
As the airspace over Russia is closed to European aircraft, the transport of goods to the lucrative Asian market must take a major detour south. Longer routes to reach delivery points force cargo planes to take on board much more fuel, which, in turn, means that they can carry less.
Getting fresh seafood, one of Norway's key exports trailing only oil and gas, to their important markets in Asia is a top priority for shipping companies.
However, the detour coupled with the fact that Russian shipping companies are now unavailable have greatly reduced the capacity of the freight market.
"The dramatic situation affects the flow of seafood", Tom-Jørgen Gangsø, the director of market analysis at the Norwegian Seafood Council,
told national broadcaster
NRK. "There is still a lot of uncertainty in terms of how seafood will go in and out of Russia, which will also affect the competitive situation for Norwegian seafood".
This leads to challenges for the Norwegian seafood industry, as the huge Asian market is the most important for fresh and frozen seafood. Additionally, Russia itself is a major importer of shrimp, Atlantic salmon, and trout.
Since the Russian airline AirBridgeCargo is no longer allowed to pick up seafood at Oslo Airport with its jumbo jets due to a comprehensive ban, freight operator
DB Schenker has calculated that the capacity for shipping to Asia has decreased by 40 to 50 percent, forcing prices to skyrocket.
According to DB Schenker communications manager Nils-Petter Buer,
the use of southern routes alone to bypass Russian and Ukrainian airspace yields a delay of two hours per flight.
Fuel prices have also risen dramatically amid the conflict.
"We now see that fuel prices are at their highest since 2008. With a combination of a significant reduction in air freight capacity, it yields record-high prices for freight. This is how it will be in the future", Buer explained.
Yet another headache for Norwegian exports is that China, one of its main markets, is now hit by anti-pandemic measures and import bans.
"Shanghai, which is the largest import port and aviation hub in mainland China, is now closed for imports", DB Schenker air freight manager Morten Würgler concluded.
The fish and seafood industry is of paramount importance in Norway. With its vast coastline, the oblong country provides ample conditions for domestic fishing and aquaculture. In recent years, revenues generated by fisheries and processing industry have soared. In 2018, the fish and seafood industry reached its highest profit, amounting to approximately 6.5 billion euros ($7.15 billion). The fisheries and aquaculture industry is Norway's largest export industry after oil and gas,
with products from captured and farmed fish exported to over 150 countries.
Russia launched its special military operation in Ukraine on 24 February, after an appeal from the Donetsk and Lugansk People's Republics, who have been suffering an eight-year-long war waged against them by Kiev. President Vladimir Putin stressed that Russia's goal was to protect the people of Donbass and that the op aims at the demilitarisation and denazification of Ukraine.
