It’s been nearly a year since Russia shocked the world and, unprovoked, invaded Ukraine. The outlook wasn’t good for the Eastern European nation; it gained independence from Russia in 1991 and is a European Union member candidate, but continued to have a strained relationship with the world’s largest country.
Of course, there are far-reaching implications. From the beginning, oil and agricultural commodities prices skyrocketed due to “shortages in some basic foods, fertilizers, chemicals, metals and other minerals as well as oil and gas from Russia,” according to Forbes. Furthermore, Russia and Ukraine account for more than 25% of the world’s trade in wheat, more than 60% of sunflower oil and 30% of barley exports. These issues have led to another crisis: global food insecurity.
“A record 349 million people across 79 countries are estimated to experience acute food insecurity in 2023,” says the International Rescue Committee. A press release from the organization adds that 94% of low-income countries are also battling skyrocketing inflation, driven in part by the war’s impact on food and fuel prices. This makes it even more difficult for people to feed their families, even if food is available.
CNN reports that the extended fighting has also led to a shortage of military equipment, including ammunition and tanks. NATO allies, especially those in Europe, have donated huge amounts of equipment to Ukraine, but supplies are dwindling. “Even the biggest supplier of weapons to Ukraine and the world’s top military exporter, the United States, is having trouble keeping up with the demand,” says CNN.
There is one bright spot: New analysis from global construction consultancy Linsesight reports, “The world’s supply chain infrastructure is now stabilizing, having recovered from the impact of the Covid-19 pandemic and the Russia-Ukraine conflict.” Lower prices for lumber, steel and diesel fuel are contributing to this stabilization, and prices for cement and concrete are expected to follow suit. Plus, more than 374,000 businesses — 90% of which are in the United States — relied on Russian suppliers at the beginning of the war; and so far, about 1,000 have stopped operations in Russia, demonstrating a commitment to supporting Ukraine in practice, not just in protest.
Linesight’s managing director stresses that understanding who you’re working with and what they’re supporting is crucial, now more than ever: “A key strategy for minimizing risk would be relationship-based supply chain management.”
Applying lessons learned
As the ASCM Supply Chain Dictionary explains, a supply chain comprises all trading partners; their policies and structures regarding information, material and cash flows; and their standards for governing sourcing, operational and logistical processes — from raw materials to the end consumer. In other words, knowing your partners is imperative for a responsible, sustainable and successful supply chain. There is simply no other way to ensure your network is acting ethically and representing your organization’s core values. Learn more in the open-access Enterprise Certification for Sustainability Standards.