Some Dockers' Unions Are Beginning to Refuse Russian Cargoes

The government of the United Kingdom has banned Russian-flagged and Russian-owned vessels from its ports, but it has yet to ban Russian cargoes - and this has unionized workers at the UK's largest LNG terminal concerned. 

The LNG carriers Boris Vilkitsky and Fedor Litke are headed for Grain LNG - the largest LNG import terminal in Europe - with plans to unload on Sunday, according to British labor union Unison. The union represents around 200 workers at the terminal, and its leaders are calling on UK transport secretary Grant Shapps to make a decision on whether to allow the arrival of Russian energy cargoes. Russia is the UK's third-largest supplier of LNG. 

“Grant Shapps must send these two ships packing. He needs to make it clear that all Russian ships are banned from every UK port and terminal," said Unison head of energy Matt Lay in a statement. “The workers at the National Grid terminal don’t want to touch the cargo given the tragedy unfolding in Ukraine. These staff are determined to show their support for the Ukrainian people and uphold the sanctions imposed against Russia.”

The Boris Vilkitsky and Fedor Litke are both owned in Greece and flagged in Cyprus. Though Greek-operated, their namesakes and their commercial mission are uniquely Russian: they are icebreaking LNG carriers, purpose-built for lifting and delivering product from Novatek's Yamal LNG facility in the Russian Arctic. 

Novatek is not fully sanctioned, though its access to U.S. capital markets has been restricted since the Russian invasion of Crimea in 2014. Its activities may be further affected by new restrictions on the Russian banking sector, but the purchase of its product is not explicitly prohibited.

Since they remain legal, Russian LNG cargoes continue to trade on the open market - though sometimes at a lower price, according to Poten & Partners. "We've seen Russian cargoes selling at a discount in the spot market. We see some Western traders still dealing in Russian cargoes, but we have seen some Asian traders say that they will not be touching those cargoes," said Jason Feer, global head of business intelligence for Poten & Partners, in a webinar Thursday. "There is a concern that it may be difficult to pay for shipping, even if payment for LNG is possible."

ILWU: No Russian cargoes

Dockers' refusal to handle Russian LNG is potentially significant for the Russian export economy, and other dockers' unions are taking similar measures to show solidarity with Ukraine. 

In the U.S., the International Longshore Workers' Union (ILWU) - which handles collective bargaining for West Coast ports - announced Thursday that it will no longer work Russian cargoes or Russian vessels, inbound or outbound. "With this action in solidarity with the people of Ukraine, we send a strong message that we unequivocally condemn the Russian invasion," said ILWU International President Willie Adams. "West Coast dockworkers are proud to do our part to join with those around the world who are bravely taking a stand and making sacrifices for the good of Ukraine."

As a practical matter, the decision will have a relatively small impact on container traffic flow: Russian cargoes make up a fraction of a percentage point of the volume handled at LA/Long Beach, the main West Coast seaport. Bulk cargoes could also potentially be affected. 

Top image: Boris Vilkitsky (Kees Torn / CC BY SA 2.0)