When we wrote in Automation Trader at the end of last year that 2022 may be the year when the situation on the supply market finally stabilizes, none of us assumed that all these forecasts could be thrown into the trash after just a few months. However, the Russian invasion of Ukraine changed everything.
Table of Contents
Looking at what is happening in Ukrainian cities, it is impossible to treat it as a magnifying glass through which we observe what concerns the automation industry. Today it is clearly visible that the problems that it struggled with during the two years of the pandemic will not disappear at all. They will only get deeper.
Chain reaction
When we talked about the problems of the industry, we focused on supply chains for a long time. Huge delays, rising prices - this was a new reality in which we had to navigate. No wonder that along with the forecasts for an imminent end to the pandemic, there were more and more voices that the situation would eventually normalize and return to the pre-2020 state.
Nothing of that. Today we already know that although news about the coronavirus no longer appears in the media with as much intensity as it did a few months ago, the specter of another threat has loomed over the world. It is, of course, about the transport paralysis that we are already witnessing, and which will only get worse in the near future.
Russian aggression sparked a real chain reaction. Martial law, sanctions, restrictions and decisions of subsequent companies to withdraw from operations in the country that attacked its neighbor are only the tip of the iceberg. Added to this is the madness on the currency markets and world stock exchanges, which ultimately gives a recipe for an explosive mixture there.
Everything stands still
What is striking when looking at the Polish market, for example, is the fact that many transport companies have lost their employees since the beginning of the war. Of course, it is about Ukrainians who in our country work mainly in sectors such as construction or transport, and who have decided to return to their homeland to take up arms there. This means that many of these companies have suddenly become unemployed and have to urgently search for new ones, which in turn means that their trucks will be forced to stop.
However, the issue of employees and rising transport prices are not everything. It must be remembered that Ukraine is currently a scene of military operations, which means that delivery services - apart from humanitarian corridors - simply do not work there. The same applies, of course, to Russia and, increasingly, to Belarus, which appear in this puzzle as aggressors and states subject to the most severe economic sanctions in history.
Transport, however, is not only about lorries and trucks. It's also planes. However, due to the fact that the airspace over Ukraine has been closed and Russia has been almost completely banned from flying to European countries, another problem arises. Fewer deliveries, higher prices, which of course make it necessary to fly in circular trances, and finally retaliation from Russia itself, which, of course, imposes a number of its own sanctions. All this means that also on this level the situation is getting worse day by day.
Transport, however, is not only about lorries and trucks. It's also planes. However, due to the fact that the airspace over Ukraine has been closed and Russia has been almost completely banned from flying to European countries, another problem arises. Fewer deliveries, higher prices, which of course make it necessary to fly in circular trances, and finally retaliation from Russia itself, which, of course, imposes a number of its own sanctions. All this means that also on this level the situation is getting worse day by day.
Uncertain trail
The last link in this puzzle is, of course, transport, which takes place in the so-called along the silk road. For years, goods have been flowing from China to Europe from Belarus and Ukraine, and then through Poland to reach other Western countries.
Today, he is saying more and more that this route may be closed, and at best the transport of goods through it will be seriously impeded. Of course, it is about both branches: the one that leads along the Belarusian route (as exerting pressure on Western countries), and the one that ultimately runs through Moscow and Kyiv. In the latter case, of course, we are talking about complete closure due to enormous destruction and war threats.
Each of these elements, combined with the already precarious global supply situation, make the forecast of transport paralysis perfectly reasonable. Add to this the turmoil in the commodity markets and the geopolitical situation that is hard to predict today, it can be assumed that it will be difficult to expect more optimistic news about supply chains in the near future.
