Russia’s invasion of Ukraine has served the global supply chain a double punch of raw material shortages and cargo disruption. For example, the two countries account for 60% of the world’s pig iron (a core component in 70% of the world’s steel) supply, collectively. Steel prices were already up 89% between December 2020 and December 2021 and the shortage of this raw material is driving them even higher. In addition, the sanctions imposed on Russia and their warfare tactics have closed shipping ports, air cargo routes, and destroyed railroads, further complicating an already fragile supply chain and global distribution climate.

In March, the Chinese city of Shenzhen was placed on total lockdown to control another outbreak of COVID causing the Shenzhan port of Yantian to face another shut down. Yantian is the fourth largest port in the world and another shut down will inevitably cause further ripples throughout global shipping.¹ To offer some context to the actual costs the pandemic has doled out to shipping, according to the Freightos index, the cost of sending a standard shipping container from China to Los Angeles rose by 20 percent in January and February to $16,353. This is an increase of 12 times the cost in the months before the pandemic. ²

We’re having conversations early and often with our clients and design partners to handle these global issues at a local level. By keeping tabs on what materials are most impacted, we can put a lead-time plan in place or suggest alternative materials that may not be facing these same challenges.

1) Fortune.com
2) Washingtonpost.com

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