Russia's invasion of Ukraine could worsen the global labor crunch in shipping, with one ship manager calling the crisis an 'operational nightmare'

• More than 10% of the world's 1.89 million seafarers are Russian, and another 4% of them are Ukrainian.
• The conflict in Ukraine could make it difficult to move seafarers in and out of the country.

The shipping industry could face an even worse labor crunch on Russia's invasion of Ukraine as about 15% of the world's seafarers come from the two countries.

If shipping companies have problems moving crew in and out of Ukraine, it could result in a manpower shortage, while Western sanctions could make it difficult to pay seafarers from both countries, reported industry publication Tradewinds, citing shipowners and ship managers who supply workers to vessels.

With 90% of global trade transported on ships, supply chains could be disrupted, said the International Chamber of Shipping (ICS).

"To maintain this unfettered trade, seafarers must be able to join and disembark ships (crew change) freely across the world," said the ICS in a press release on Thursday. The chamber estimates that 10.5% of the world's 1.89 million seafarers are Russian, and another 4% of them are Ukrainian. "The ability to pay seafarers also needs to be maintained via international banking systems," the ICS added.

The shipping industry is already facing a labor crunch and operational issues due to issues with vaccine recognition, border controls, quarantine requirements, and movement restrictions amid the pandemic. Operational challenges could intensify with the Russia-Ukrainian conflict, one ship manager told Tradewinds.

"What do we do if we have Russian and Ukrainian crew on the same ship?" the ship manager told the outlet. "What is going to happen if we have Ukrainian crew on a ship that is calling at Russia, or Russian crew on a ship calling at Ukraine? The whole thing is going to be an operational nightmare," he added.

There may also not be enough workers in the first place: Ship managers, who supply crew to major shipping companies, also expect many Ukrainian seafarers to be drafted into the military, per Tradewinds.

Ukraine has banned all male citizens from the ages of 18 to 60 from leaving the country, according to CNN, which cited the State Border Guard Service. This development comes as Ukrainian President Volodymyr Zelensky ordered a general military mobilization across the country.

The worries about a worsening labor crunch in shipping come as container freight rates remain high.

According to the Drewry World Container Index released Thursday, the spot rate for a 40-foot container from Shanghai to Los Angeles rose 3% from a week ago to $11,030.