Shipping giants MSC and Maersk suspend deliveries to Russia

The world’s biggest shipping lines, MSC and Maersk, on Tuesday suspended container shipping to and from Russia, deepening the country’s isolation as its invasion of Ukraine sparks an exodus of international companies.

The West has imposed heavy restrictions on Russia to close off its economy from the global financial system, pushing companies to halt sales, cut ties and dump tens of billions of dollars' worth of investments.

The move by MSC and Maersk mean Russia — the world’s eleventh-largest economy and supplier of one-sixth of all commodities —  is now effectively cut off from a large chunk of the globe’s shipping capacity.

To stem the stampede, Moscow said on Tuesday it would temporarily curb foreign investors from selling Russian assets but energy firms BP and Shell have already decided to abandon their Russian businesses, while leading banks, airlines, carmakers and more have cut shipments and ended partnerships.

Austria’s Raiffeisen Bank International (RBI) is looking in to leaving Russia, two people with knowledge of the matter told Reuters, a move that would make it the first European bank to do so since the invasion.

Mining and commodities group Glencore  said it is reviewing all business activities in Russia, including equity stakes in EN+ and Rosneft.

“The corporate world is building up a fortress to isolate Russia from the international community,” Hargreaves Lansdown senior investment and markets analyst Susannah Streeter said.

French oil and gas group TotalEnergies said it would no longer provide capital for new projects in Russia, while ExxonMobil Corp has begun removing US employees working there, a person familiar with the matter said.

Paramount Pictures became the latest Hollywood studio to halt theatrical film distribution in Russia, announcing on Tuesday that it would pause the release of upcoming films  The Lost City and Sonic the Hedgehog 2.

In a matter of weeks, Russia has turned from a lucrative bet on surging oil prices to a financial pariah with a central bank hamstrung by sanctions, major banks shut out of the international payments system and capital controls choking off money flows.

US payment card firms Visa and Mastercard  have blocked multiple Russian financial institutions from their network.

Major car and truck makers, including Volvo Cars, AB Volvo, General Motors, Harley-Davidson and Jaguar Land Rover, have also cut off exports to Russia.

Finnish telecoms equipment firm Nokia joined rival Ericsson in saying it will stop deliveries to Russia to comply with sanctions.

As fallout from the crisis ripples across industry, some manufacturers in Europe are starting to face supply issues.

Europe’s largest carmaker, Volkswagen, on Tuesday warned of production cuts at some plants as Ukraine-based suppliers have been facing difficulties delivering after Russia’s invasion.

Czech carmaker Skoda Auto, part of Volkswagen, will also curb production due to supply shortages.

Prysmian, the world’s largest cable maker, warned of a metals supply crunch from the sanctions on Russia.

CEO Valerio Battista said the company has just one plant in Russia but problems might arise from the effect of sanctions on the flow of metals such as copper — one of the basic materials in the cable industry.

The Swiss-based company that built the Nord Stream 2 gas pipeline from Russia to Germany is considering filing for insolvency, two sources familiar with the situation said, as it attempts to settle claims ahead of a US sanction deadline.

The company, Nord Stream 2, did not comment on possible insolvency.

The US  has restricted exports of tech hardware, including computers, sensors, lasers, navigation tools, telecoms, aerospace and marine equipment, prompting many tech companies, such as Dell Technologies Inc, to suspend Russia sales.

The big US tech companies are juggling calls to shut services in Russia with what they see as a mission to give voice to dissent and protest.

Facebook parent Meta Platforms will restrict access to Russian state media outlets RT and Sputnik on its platforms across the EU, it said.

YouTube is also blocking channels connected to RT and Sputnik across Europe, the company operated by Alphabet’s Google said.

Some US state-linked investors have been vocal in setting expectations for corporations, with Connecticut Treasurer Shawn Wooden saying he would direct state pension funds to sell Russian assets.

“We need to send a very clear and unequivocal response that California will not stand for Russia's aggression,” California treasurer Fiona Ma said on Monday, declaring support for divesting Russian assets from the state’s pension funds.

Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists.

Airlines are bracing for lengthy blockages of east-west flight corridors after the EU and Moscow issued airspace bans, which are estimated to affect 20% of global air cargo.

EU officials are speaking with their US counterparts about extending the current airspace bans imposed on Russia, a senior EU official said on Tuesday.

Reuters