5 Supply Chain Consequences of the War in Ukraine

Jul 29, 2022 | Supply Chain Problems

Not only has the war in Ukraine had a devastating impact on the people of the country, but it has also sent profound shockwaves through global supply chains that were already reeling from years of disruption caused by pandemic-induced lockdowns. 

Famine is Stalking the Planet

Together, Russia and Ukraine account for 25% of the world’s wheat production, as well as 60% of global sunflower oil and 30% of global barley exports. As a result, food prices everywhere are soaring everywhere.

Energy Costs are Skyrocketing

Widespread bans on the import of Russian oil and gas are leading to rising energy prices that have a knock-on effect across supply chains and the global economy. 

Microchip Production Has Been Throttled

Tier 2 inputs, such as neon, have dried up. 70% of all neon is used in semiconductor chip manufacturing, and more than 50% of the world’s neon supply comes from Ukrainian factories, which have all shut down production.

Over 300,000 US Businesses are Scrambling

Deloitte reports more than 336,000 American businesses were heavily reliant on Russian suppliers and forced to quickly find alternative suppliers. 

Ocean Exports Have Been Devastated

By some accounts, there has been a 54% decrease in vessel volumes near Russian ports and a 40.2% drop in daily peak TEU vessel volumes.  

The war is having an impact all the way up and down the supply chain. Patience with providers, kindness and agility are key in maintaining good relationships and finding solutions to the crisis that few could have imagined or planned for at the beginning of the year. 

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