Ural Boeing’s titanium production plant in Russia © ArtEventET |
Aerospace and automakers are at high risk if Putin’s Russian regime chooses to retaliate against sanctions imposed by the West and its allies.
A report from Flexport says blocked trade routes, reduced sales opportunities and restrictions on exports of critical Russian metals are likely to hit some manufacturers hard, with companies already acting to build capacity to handle the pressure.
“The automotive industry faces all three challenges – sales, supply and operational issues – with palladium, platinum and aluminum globally dependent on Russian supplies,” the report said.
“Several automakers and parts producers, including tire manufacturers, have warned of their reduced ability to import auto parts into Russia and will therefore reduce manufacturing in the country or move production to other countries. .
“Sales of luxury cars and motorcycle supplies, especially from the United States, are also being restricted.”
Major aerospace manufacturers are also moving quickly to restrict their parts exports to Russia, but Flexport notes those companies could also face challenges if access to critical metals is restricted.
In response to concerns over any package of Russian counter-sanctions, French jet engine maker Safran has already begun stockpiling several months worth of titanium.
Flexport said: “The conflict and the sanctions are evolving rapidly. Business responses are still in their infancy and face another source of complexity and increased procurement costs.
“The main area of counter-productivity would come from the impact of rising commodity prices, which has exacerbated the longer-term increase in input costs for supply chains.”
A sender said The Loadstar he was already seeing shipping prices rise again and expected the impact of rising fuel costs to further drive up the cost of goods.
But, despite concerns about rising costs and business complications, supply chain sources supported efforts to end Putin’s war with Ukraine.
Last week, DSV became the latest multinational to suspend services to Russia and Belarus in response to the invasion, noting that the only goods it would transport would be those related to medical and humanitarian supplies.
“We emphasize that we are doing everything possible to mitigate the negative effects of these measures on the supply chain,” he said. “Our teams continue to maintain a close dialogue with our partners and to monitor the new sanctions imposed. This is to ensure that we can advise our customers and ensure that DSV acts in accordance with all international sanctions.
In the meantime, DB Schenker has opened a collection point in Cologne for donations to Ukraine, is opening a rail bridge with Deutsche Bahn to deliver humanitarian aid and has set up a hotline to register freight and coordinate collections. Transportation is free for donors. Phone: 030-720220640 or click schienenbruecke-ukraine[email protected]
And Flexport is arranging shipments of relief supplies to Ukrainian refugee sites across Eastern Europe. You can donate here.