How the War in Ukraine Is Further Disrupting Global Supply Chains

Could It Impact Your Commercial Tire Repair Needs?

There’s nothing short of shock that can explain how most people worldwide feel about what’s happening in Ukraine. The impact on lives is incredibly tragic. Reports now indicate that the Russian invasion may also impact the global supply chain. That may mean the next time you need commercial tire repair, the process will be a bit more difficult and time consuming if product isn’t available.

Russia’s Incursion Forces Companies to Comply with New Sanctions

Global supply chains have yet to recover from the pandemic. Yet, those prolonged deliveries are likely to take much longer thanks to the numerous companies in Europe and around the world now willingly complying with sanctions on Russia. For many companies, that means finding a new supplier for their most important components – platinum, aluminum, sunflower oil, carbon black, and steel. Numerous factories for all types of goods have shuttered in Ukraine, Russia, and Europe as a whole.

To add to this, energy prices in the area, and most places around the world, have risen sharply, making it more difficult for factories still in operation to operate efficiently. That’s also led to higher shipping costs for transporting goods.

A Power Shift to Come

While the current Ukraine situation is worrisome for the global economy itself, there’s also fear about what is to come. The current China-U.S. trade war and crippled supply chain, thanks to the pandemic, are both still very much a problem. As more companies work to near-shore or bring manufacturing home to the U.S., there’s still a dependence on other countries for raw materials. Should China decide to back Russia in its invasion, some experts believe this could further worsen trade relations with China, making it harder for U.S.-based companies to get the products they need.

Transportation Costs Linger as an Ongoing Factor

Another core area of concern for all companies is the increased cost of shipping. Rising oil and gas prices, thanks in part to the war, will make it financially difficult for companies to keep prices ‘status quo’.

This is further made difficult for companies that have been building products in Asia, where manufacturing costs are significantly lower. Many of these companies rely on Russian railways to transport those goods. Some of those components may now need to ship by air when possible. Yet, that’s significantly more expensive, especially now that airlines need to bypass Russian airspace when they make those trips to Western Europe.

Finding Products Elsewhere

Another concern is finding raw materials traditionally purchased from Ukraine. It’s become nearly impossible for companies to export goods from the country. That’s led global manufacturers to seek out alternative supplies, but there’s a limit to what’s available elsewhere. In particular, Ukraine supplies about half of all neon gas, a necessary component in semiconductor chips.

Commercial Truck-Impacted Concerns

Another area of current concern is the truck manufacturing industry, which is struggling with an inability to access wiring harnesses, which were commonly sourced by Germany from Ukraine. That could lead to plant closures.

Some tire manufacturers have factories in Russia. This includes companies like Bridgestone Corp, Michelin Group, and Pirelli Tyre, among others. Also, Goodyear, Apollo Tyres Ltd, and Hankook Tire & Technology Co. Ltd. have factories in countries bordering Ukraine.

Many fleet owners/operators opt for offshore tire brands because they are less expensive. Interestingly, *79% of these owner/operators are not retreading these offshore tires. It remains to be seen whether this trend will change toward a greater preference for locally manufactured brands, and/or toward choosing to retread offshore tires.

Source: https://www.trucknews.com/blogs/a-deeper-look-at-offshore-brands-and-retreading-practices/

What You Can Do Now?

As a business, you know the importance of maintaining your vehicle. Don’t put off a commercial tire repair; especially when it means repairing rather than replacing your tires. Also, turn to companies that are working to keep manufacturing close to home. There are over 500 retread manufacturing facilities spread across the US and Canada.

The environmental impact of cheap, use-once-and-dispose tires is too great to ignore. On the other hand, retread tires offer significant environmental benefits. According to this research report, “The U.S. and Canada tire retread industry … saves approximately 217.5 million gallons of oil and delivers 1.4 billion pounds of landfill avoidance on an annual basis.”

STTC offers 24/7 emergency road service to help you if you need commercial tire repair. Give us a call now at 610-954-8473 or contact us online when you need commercial tire repairs or new tires for your trucks and trailers.