This editorial was first published in the April 2022 edition of Inside Logistics. .
Three weeks ago Russia invaded Ukraine. This brazen act of aggression by Russian dictator Vladimir Putin has displaced millions of Ukrainian citizens, killed hundreds, flattened cities and traumatized the world.
Europe is reeling and bracing for the worst, while NATO is so far sitting on its hands, hoping that trade sanctions will slow down Putin’s juggernaut.
Regardless how it plays out now, the damage to trade, logistics, and the global economy has been done. As we have documented on our Inside Logistics website, thanks to our new intern Krystyna Shchedrina (a student from Ukraine who is studying at Ontario’s Humber College journalism school), disruptions to logistics were immediate. Transportation links to Ukraine have been severed.
Russia’s aim of cutting Ukraine off from its seaports on the Black Sea and Sea of Azov has so far been remarkably effective, with the ports of Odessa, Mariupol and others ceasing operations. These ports are lifelines for grain exports leaving Ukraine, and for goods going in.
Likewise, Ukrainian airspace is a no-go zone for commercial air traffic now, and with major airports bombed out of existence, it will be a long road to recovery once the war is over. Trucking is equally hampered by fighting and the call-up of Ukrainian men to serve in the militia.
And the damage goes far beyond Ukraine’s borders. “The conflict has added new risks to a world economy that was already struggling with rising inflation, bottlenecks in supply chains, and the lingering effects from the pandemic,” said Kip Beckman in a Conference Board of Canada briefing. “The immediate effect of the war on the global economy will be even higher inflation, weaker real GDP growth and a disruption to global financial markets.”
On a practical level, “importers and logistics services providers will face a congested, disrupted, expensive and frustrating 2022 and must strategically consider the longer-term impacts of the ongoing crisis in global shipping,” said Chris Jones, EVP industry and services at Descartes, in an early March report on the global shipping crisis.
For supply chain management, the longer-term implications include speeding up the trend towards deglobalization that was already intensifying thanks to the coronavirus pandemic.
War is ugly and disgustingly wasteful. Regardless of the logistics impacts, Canada needs to find a meaningful way to step up and support the people of Ukraine in fighting off this terrible injustice.