Russian Invasion Of Ukraine Threatens To Further Disrupt Global Supply Chains
Updated: Jul 22, 2022
2020 bought unprecedented disruption to global supply chains. For obvious and extremely well documented reasons.
Russia's invasion of Ukraine now threatens further disruption. Many companies are ending their operations in the region as the conflict grows. A.P. Moller-Maersk has stopped from calling into any ports in Ukraine "until further notice," and UPS and FedEx have suspended their services to and from the country.
Important materials shortages are also the inevitable result of the invasion and subsequent economic sanctions. This could lead to demand volatility, important materials shortages, as well as cost increases of those materials and cyber-security breaches.
Even for businesses who do not have a Tier 1 or Tier 2 supplier relationship in Russia or Ukraine, the conflict "really has the potential to create some debilitating disruption across industries from energy to agriculture." This is according to Per Hong, a partner in Kearney's strategic operations practice who spent more than six years leading the firm's Russia unit, in an interview Thursday.
"We expect severe shortages of hydrocarbon, critical minerals, metals and energy. Prices for those items will likely spike, thanks to both the shortages and behaviors such as irrational buying and protectionism. This will, in turn, impact manufacturing operations up- and downstream as much as raw material mining." This is according to Gartner analysts Koray Köse and Sam New.cary
Nucleus for one, is hoping for a speedy and just resolution to this highly unnecessary conflict.