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The Russian Invasion And Your Business

What the Russian invasion means for your business

Are you still trying to figure out what the Russian invasion means for your business? You’re not alone. The fallout from the invasion is still being felt throughout supply chains around the world. Here’s a breakdown of how the crisis is affecting transportation and logistics companies.

Since Russia’s military intervention in Ukraine, the global security situation has been cause for concern. But what does this mean for businesses and their supply chains? The answer is not yet clear, but companies are already feeling the ripple effect as they re-evaluate their strategies. In this blog post, we’ll explore some of the potential implications of the Russian invasion and how transportation companies can prepare for them.

The Russian invasion of Ukraine has been making headlines for weeks now, but many people are still unaware of the implications it is having on global supply chains. Shipping companies are being forced to reevaluate their routes and logistics managers are having to make quick decisions to minimize disruptions.

Despite how and when the Russia/Ukraine War ends, the impacts are already being felt by many supply chains, leading to production stoppages, port closures and other bottlenecks sure to create additional supply chain disruptions for months to come.

When Russia first invaded Ukraine, the human being side of me sympathized with the families whose lives will never be the same. Families separated at the border or torn apart by death. Infants born in bomb shelters. Mothers struggling to just keep going, no matter what.

As the United States embarks on the two-year anniversary of when the Coronavirus disease (COVID-19) pandemic hit, how will this war affect our nation, one that’s may possibly just begin to turn a corner into the right direction.

Well, for starters, fuel prices continue to rise, further impacting fleets and compounding the driver shortage even more.

Grocery retailers and their consumers are also feeling the heat, as prices for groceries and ingredients continue to rise, while the product shortage remains a threat to the cold food chain.

The Russia/Ukraine War has also shut down the operations of several third-party logistics (3PL) providers in Ukraine, putting all goods coming in and out to a standstill. And goods scheduled to import into Ukraine are now be re-routed to other countries such as Poland to help aid the Ukrainians who’ve fled their native country to safety elsewhere.

What’s more is, the impact of major ocean carriers pulling out of Russian ports results in a 40.2% drop in daily peak TEU vessel volumes and a 54% decrease in vessel volumes near Russian ports, according to project44. And, Maersk, MSC and CMA CGM have all suspended deliveries into and out of Russia.

Furthermore, suppliers are shutting down production lines, putting a stop to all goods even being manufactured, which will then create a ripple through the global supply chain.

Ukraine and Russia are top exporters of major grains and vegetable oils, according to a Vox analysis of the food export data from International Trade Centre in 2020. Ukrainian agriculture will also be affected as farmers are pushed off their farms and port closures limit exports.

Everstream Analytics has tracked more than 35 companies that have halted production operations across Ukraine and Russia, with most belonging to the consumer goods and automotive sectors.

Everstream Analytics

Freighters and airlines have warned that the airspace closures could increase the cost of flying cargo from Europe to Asia, potentially leading to delays and even making some routes commercially unviable, according to Everstream Analytics. Most of the airlines have been re-routing airplanes via the Middle East.  Several freight forwarders had already suspended operations to and from Ukraine, with UPS and FedEx suspending shipments into Russia.  Besides ocean carriers diverting cargo to Ukraine to alternative ports along the Black Sea and beyond, impacts should also be expected on rail connections from China to Europe, particularly those passing through Russian territory, Everstream Analytics adds.

The Russian invasion into Ukraine has caused a ripple effect through the world’s supply chains. Many companies are still trying to assess the damage and determine how to best reroute their shipments. IQ Transit is here to help you create a logistic solution that will keep your business running smoothly despite these disruptions. Contact us today and let us show you how our services can benefit your company.