Skip to the content

Menu
Translate this page

Ukrainian War – Shrinking Supplies and Rising Costs

Shipping containers against a blue sky
The Ukraine War is affecting access to essential supplies for businesses.

With the devastating actions going on between Russia and Ukraine, the world has witnessed some of the worst human suffering events of the modern day, with human casualties, infrastructure destruction and world financial disruption. In 2020 Ukraine reported a $49bn exportation of goods. This has now come to an almost complete stand-still, resulting in industries across the globe having to source their goods elsewhere, at a notably greater financial cost.

After speaking with our clients throughout Northamptonshire and Peterborough, we have seen a common trend of the knock-on effect of these outcomes, both to small and large businesses. Trade and materials have seen the biggest hit since Covid-19 lockdowns, with costs of materials over doubling for some industries and trade forecasts taking a devastating hit for the new financial year. Ukraine is a leading distributor of Iron and Steel, making up 15.6% of their exportation, meaning local companies who rely on these materials, are now battling to find alternative suppliers and facing the resulting rising costs.

It hasn’t gone un-noticed that the current fuel crisis, with costs sharply rising, means that what was once seen as a commodity, is now being seen as a luxury. Workers are being forced to re-evaluate job opportunities and find work closer to home, to lessen the costly impact of a simple commute to work. Russia have been a huge distributor of fuel and because of the government placed sanctions, we are now facing costs which have never been seen in the UK, simply to fill up our vehicles.

The devastating actions of this war are not the only restriction on the import of goods. What with China continuing with strict lockdowns, there has been a noticeable reduction in sea freight exportation to Europe. Logistics and supply chain companies are therefore having to redistribute their movement of goods, with many sourcing local and closer alternatives to the UK.

But how expensive can things get? Will it ever go back to normal? These are the questions we have been discussing with our clients and finding out their concerns.

Advice for businesses who are affected by supply chain issues, is to take a holistic view of their suppliers and suppliers’ suppliers, all the way back to the sources, planning for contingencies and exposing vulnerabilities. This means coming up with alternatives and ultimately aiming to lower reliance on specific suppliers.

Being upfront with customers and managing their expectations is especially important during this time. Honesty and transparency are valuable qualities for businesses to demonstrate, more now, than ever before. With the world looking to bounce back from Covid-19, the times are uncertain for everyone, but trust between businesses, if built properly, can last through tough times.

Companies should also be evaluating their cultures, and how flexible to new ideas and innovations they are. Fostering a culture of open-mindedness and freedom to make suggestions gives access to different solutions that might be overlooked otherwise.

You can also look at your staffing, how is your procurement team coping, could they benefit from more support or training? Joining local business communities such as the Northampton Logistics Forum or Northamptonshire Chamber of Commerce could grant access to research and ideas that are otherwise difficult to find.

If you would like to discuss any of the topics in this article you can set up a consultation call by emailing info@impactrecruitment.co.uk

About the author

Josh Hacker

A former Mixologist, Josh brings the perfect cocktail of ‘The Resourcer’ to Impact. Mix 50ml of personal motivation and drive, 50ml of team player, 50ml of communication and a dash of ambition then pour over ice into a long glass garnished with a sprig of fresh work ethic. Cheers!