Ukraine War Adds to Supply Shock

Mar 3, 2022Articles

The world was kicked in the gut again by Russia’s recent invasion in Ukraine. This aggressive military action not only causes needless destruction and deaths but also intensifies the current supply-chain crisis. In addition to the current shortage of grains, meats, and durable products that come from the region we can expect to see a rise in oil and natural gas prices.

Russia is also a big player in global markets for copper, aluminum and palladium. Disruptions in Russia’s production or delivery of those products could very well affect supply chains for catalytic converters in cars, capacitors used in cellphones and even dental crowns.

But there may be some good news… at least for the short term. The energy markets have changed since the 1970s when we suffered through a time of inflation and OPEC’s decision to cut off oil supplies to the West. Today the U.S. depends less on imported oil, which reduces the economic threat from Russia’s invasion of Ukraine. The U.S.’s recent advanced fracking techniques has created a positive supply shock in the form of more domestic oil and natural-gas production. We are now seeing signs of prices lowering. According to a recent article in the Wall Street Journal: “If the constraints persist and keep pushing inflation higher, then the only way to tackle the price problem is to push demand down. The main tool that policy makers have to do that is interest-rate increases by the central bank. Fed officials were already on course to raise interest rates, but hoped to proceed slowly as the economy reopens. A war in Ukraine won’t help and could force the Fed to be more aggressive than it had hoped.”

What can U.S. manufacturers do in the meantime? Seek innovative ways to improve the business’ supply chain process. A good place to start is by addressing flaws in your inventory management system. At Shippers Solutions, we offer a cutting-edge program that is designed to never let you run out of raw materials by automatically replenishing inventory.  The program is called Supply Stream. If you’d like to learn more go to and watch our introductory video on the home page.