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Maersk closing all operations in Russia and Belarus

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Shri Vaibhavi Logistics

COPENHAGEN : Maersk has stopped all vessel operations in Russia and service with Belarus and is “winding down” its domestic operations in both countries. It booked a US$718M financial impact from the Ukraine war in Q1 2021.

Maersk had earlier advised that it would cease all its operations in Russia and Belarus. On 2 May the company completed its last cargo operation in a Russian port. For its domestic operations within both countries, Maersk said “they are gradually being wound down and/or divested. The wind down does not allow for any new business in neither Russia nor Belarus”.

“The safety and stability of our people remains at the forefront of our minds, and we have worked steadily to ensure that our people are safe,” Maersk said in an advisory. “We have done our utmost to withdraw from Russia in a responsible way, with our offices in Far East Russia, Novorossiysk and Kaliningrad expected to close down during the summer of 2022. The Saint Petersburg and Moscow office will run until the end of the year. Our Belarus office will also be shut down during the summer.”

As reported previously A.P. Moller – Maersk is divesting its 30.75% share of Global Ports Investments (GPI) which operates six terminals in Russia and two in Finland. Other operations that it is exiting include two warehouses in Russia, a cold storage facility in St. Petersburg and an inland terminal in Novorossiysk.

Maersk added that it has done its utmost to accommodate affected cargo under the circumstances, including arranging alternative end-destinations. “However, for some customers this has not been possible despite our efforts. We will always work with the objective of minimising disruption to our customers’ supply chains and we strongly encourage affected customers to keep the lines of communication open between our teams. This is to ensure that we find the best solutions for your company’s logistics”.

Exiting Russia is coming at a high cost for Maersk. The total US$718M impact on EBIT it booked in Q1 2022 is broken down across the business units Ocean ($162M), Logistics & Services ($53M), Terminals ($485M) and Towage & Maritime Services ($18M).

Booking a $485M impairment in the Terminals business reduced its return on invested capital in Q1 2022 to 7.1%. Excluding the impact from Russia that return would have been 12.5%.

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