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Impact of Russia-Ukraine Crisis on Global Supply Chain & Relocations

Posted: 6/24/2022
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 Russia’s energy output makes up 14 percent of the world’s total supply, putting it among the top exporters of energy. With the recent Russia-Ukraine confrontations, it is safe to say that the already flimsy global supply chains have been startled. Following the COVID-19 pandemic and recent inflation, supply chains—typically extensive networks of resources, people, money, and information that assist companies in delivering goods or services to the end user—were already in disarray. With this crisis already exacerbating the situation for businesses in many sectors, it remains to be seen how companies will cope with the need for employee relocations now and in the near future.


The Initial Impact of the Russia-Ukraine War
The energy sector is among the most impacted by the war. About 40 percent of Europe’s natural gas supply comes from Russia. Also, Russia supplies 7 percent of all the USA’s crude oil and petroleum product imports.
Following the decision by Biden’s administration to put a stop to the importation of Russian oil, crude oil and gas prices in the country soared, leading to a domino effect.


Effect of the Russia-Ukraine War on Relocations

Russia and Ukraine are major suppliers of semiconductor-grade neon used for chip lithography. Russia also provides the U.S. with more than one-third of its palladium, a metal crucial to semiconductor production. While industries can meet the immediate need for these products, disruptions will soon be felt.
It’s worth noting that this war began at a time when the world was already grappling with a severe chip shortage. Auto production had already slowed, blowing the prices of new and used cars sky-high. Over time, the effects have spilled over to the moving industry.
The disruption of trade routes and the closure of airspace to Russian aircraft has also spelled doom for freight businesses operating in China, Europe, or the Eastern U.S. Goods that can be moved around the world are now being shipped at higher costs, not to mention the delays caused by the sanctions imposed on Russian-connected vessels.
Russia reiterated travel restrictions imposed on them by European countries by imposing reciprocal flight bans, a decision that has brought travel between the regions to a halt.
Companies looking to relocate their employees to Europe will certainly feel the full effect of these airspace restrictions, including long travel times and costlier tickets. Undoubtedly, this will create backlogs for moving companies and businesses that rely on airfreight.

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