The supply chain remains strained as the global economy strives to restore and stabilize from the last two years of turmoil. Many companies are finding that their suppliers are unable to keep up with demand, resulting in shortages and increased prices.

This trend is likely to continue in the coming months as the conflict in Ukraine takes over the pandemic disruptions. Companies that rely on overseas suppliers will be particularly affected, as supplier capacity in many developing countries is already strained.

“The greatest risk facing global supply chains has shifted from the pandemic to the Russia-Ukraine military conflict and the geopolitical and economic uncertainties it has created,” – Tim Uy of Moody’s Analytics.

This is likely to have a ripple effect throughout the global economy, as companies are forced to find new suppliers, which may be difficult in the current climate. Due to the uncertainty of the global economy, many businesses have been cautious to enter new supply chains, exacerbating the situation.

As a result of all of this, businesses should expect a challenging year as the global supply chain tries to keep up with demand.

“Amidst this ongoing volatility is the new consequences arising from the Russia-Ukraine crisis that could leave the world facing extended reductions to energy supply,” says the recent Dun & Bradstreet report.

This has caused concern for many U.S. businesses that heavily depend on Russian distributors. The report also states that 374,000 enterprises worldwide depend on Russian distributors, with 90% of them based in the United States.

This makes the Russian-Ukraine conflict not only a geopolitical problem but also a major issue for global businesses. As the situation continues to deteriorate, companies should expect disruptions to their supply chains and increased prices.

Bottlenecks at ports, labor shortages, and supplier bankruptcies are all likely to become more common in the coming months. Businesses should take this into account when planning their operations for the rest of the year.

The global supply chain is about to get a lot worse and businesses need to be prepared for the consequences. Stay updated on our latest articles here.