Russia-Ukraine War Snarls Global Supply Chains

Disruption has always been a catalyst for more voracious management in the supply chain. Yet, relentless disruption has worn on supply chain leaders and decision-makers since 2020. While those in logistics wonder if the new scientific bracelets to convert stress into energy, such as those reported by Interesting Engineering, are legitimate, there are still very real supply chain risks to contend with today. The ongoing Russia-Ukraine war continues to impact global supply chains, and it's much more than many realize.

Through Q1 2022, significant impact is easy to see. Parcel carrier fuel surcharges come first to mind, but there are other effects beyond the surface. Meanwhile, major U.S. companies are working with the Biden Administration to understand the gambit that such disruption will have on inflation and the ongoing COVID-19 recovery efforts. Despite these significant complications enveloping the industry, shippers must know what's happening, the current impacts, and what changes are predicted as the war and other disruptions endure.

Why Ukrainian Impacts Ripple Into Global Trade

While many individuals and establishments choose to make political stands by pouring out vodka, there are already more significant consequences. According to the Harvard Business Review, "Equally important, Ukraine supplies about 50% of the world's neon gas, which is used to produce semiconductor chips. Governments and large corporations are now scrambling to obtain alternative supplies, but the supply is tightening, and prices have dramatically increased. Russia and Ukraine are also big exporters of grains such as corn, barley, and wheat as well as fertilizer. While the war's full impact on global food supplies is not yet clear, prices are already skyrocketing." Middle-class America was already reeling from the impact of the coronavirus-induced semiconductor crisis. How will the change in neon gas sourcing change the future of car shopping?

Although many Americans might not be concerned by the potential for grain shortages, third- and second-world countries familiar with the concept of an actual famine are already aware of what these changes mean for them. In particular, both wheat and corn are household staples across the globe for everything from tortillas to pita bread and more. The shortages will not just hit those who use the grains as-is but also manufacture popular items with them, such as packaged snacks or alcoholic beverages.

In addition, the war in Eastern Europe has coincided with a recent surge in Russian hackers successfully stealing company data or holding it hostage. In these times, supply chain professionals must ensure their data security methods are shockproof and secure.

Shippers Need an Omniscient View of Freight Data to Stay Strategic

So how do supply chain businesses respond? It's imperative that decision-makers take the conflict overseas seriously, as even industries untouched by the change in grain or neon gas sourcing will be impacted in other ways. As reported by Jan O'Donnell of TechTarget, "The war, along with sanctions on companies doing business with Russia and U.S. companies pulling out of Russia, will have longstanding effects on global supply chains and exacerbate global inflation, according to industry experts. But it may also provide opportunities to address supply chain vulnerabilities."

Addressing vulnerabilities may look different across the supply chain. Perhaps some companies have apparent weak points directly due to this war. In contrast, other businesses might read this and know their weaknesses are negotiating freight contracts or understanding domestic freight terms. Regardless of the known vulnerabilities, freight management parties must also consider the value of discovering underlying susceptibilities.

Shippers with actionable data can better plan all freight moves, whether intermodal, within overseas continents, or global ocean freight. This data may prove the protective effect of increasing and diversifying suppliers and distributors. By analyzing transportation cost data, shippers can stay strategic to learn what modes, means, and lanes will best serve each shipment. An integrated common data source will also provide tools to track performance to optimize overall and individual business processes.

Fight Against Disruption With Data-Driven Management Through Intelligent Audit

The Russia-Ukraine war weighs heavily on all global companies, and its effects will translate into future supply chain disruptions for several years. Further, those effects will cross all borders and impact the most remote transportation networks and logistics strategies. As a result, shippers must first recognize those risks and then respond. What processes must be established to know what's happening and what must be done next to survive? The answer to that question is found in the functionality of a single source of truth for freight audit data through Intelligent Audit. And that value is available to domestic shippers in need of an international freight audit and those operating wholly or partially overseas. Request a consultation with a freight data and analytics expert at Intelligent Audit today.