Wednesday, April 6, 2022
Russia-Ukraine conflict reignites tension over logistics –raw material management once again after the pandemic. First the lockdown affected the logistics and raw material management in the industry, and now the following year is witnessing another crisis owing to the conflict between Russia and Ukraine.
The war in Ukraine has exacerbated the criticalities on the supply chains caused by the pandemic, with sharp increases in the prices of some raw materials and with increasing delays and increases in freight logistics that hinder the normal operations of companies.
In fact, in the first quarter of 2022, more than half of manufacturing firms in the Northwest (51 per cent) said they were suffering from obstacles to exports. The main adverse factors include “prices and costs” (for 24 percent of companies) and the “lengthening of delivery times” (for 15 percent). Furthermore, the share of companies that highlight “other factors” among the main obstacles affecting exports has increased considerably from 8 percent in the fourth quarter of 2021 to 26 percent in the first quarter of 2022, an increase at least in part attributable to the instability caused by the Russia-Ukraine conflict.
As regards the “extension of delivery times”, the crisis in Ukraine is part of a logistics framework already characterized by great uncertainty: throughout 2021, delays in supply chains have gradually intensified, only to decrease between January and February 2022, thanks to the first signs of easing of the pandemic restrictions detected in the months of January and February. But in March 2022, with the outbreak of the war, average delivery times began to grow again throughout the euro area.
In terms of costs, the invasion of Ukraine has led to considerable increases in the freight rates of the sea routes adjacent to the affected territories, with reference to both small-sized oil tankers deployed between the Black Sea and the Mediterranean, and to cargo ships transporting grain and cereals passing through the Black Sea.
A second focus concerns the prices of raw materials which, more than a month after the start of the conflict, remain at levels higher than those of early February 2022 and above all well above the pre-pandemic period.
Tags: logistics, logs, Russia, ukraine, wood, wood and panel, wood industry, Wood UK
Comments: