How Russia-Ukraine War Affects Construction Supply Chain

How Russia-Ukraine War Affects Construction Supply Chain

The Russia-Ukraine war took everyone by surprise back in February 2022 when Vladimir Putin announced the invasion of Ukraine and labeled it as a “special military operation”. The Russian authorities have amassed troops at Ukraine borders for months before and this significantly disturbed construction supply chains, damaged infrastructure and caused a lot of chaos in the region.

But how does this invasion affect the prices of construction materials globally? And what is to be expected in the near future as the war drags on? These are great questions and you’ll find inspiring insights in this article, so keep reading.

Prices Will Increase on Certain Materials

The construction industry is based on acquiring and using different types of materials, some of the most important of them being forestry products. Russia is one of the largest exporters of lumber as well as other materials such as copper and nickel. At the same time, Ukraine also exports massive amounts of titanium, iron and manganese. As the war continues and immense resources are poured into military initiatives, it’s expected that the prices for these goods will increase significantly in the upcoming months.

Companies Might Need to Establish New Delivery Routes

The Russian armed forces are surrounding Ukraine from different fronts and virtually closing up escape or trade routes. This can have dramatic economic consequences and it’s expected that various construction companies will look for other delivery routes to continue their operations. The aviation industry is already diverting flights to bypass Ukraine and Russian airspaces, even if this means increasing flight times. Similarly, construction companies might need to establish new delivery routes that go through more peaceful regions and this means that customers might have to wait for more for their products to be delivered.

Prices of Transporting Goods will Increase

Taking longer routes also means that delivery prices will increase. If a type of cargo normally takes a week to be delivered but now it takes two weeks, customers should expect to pay more. That’s because the logistics become more complex and more fuel is consumed to deliver the same goods to a certain destination.

Shortages of Raw Materials Can Appear

Not only that it might take longer to deliver lumber products, aluminum, iron or other types of metals to customers, but a shortage of raw materials can also appear. That’s because some companies might go bankrupt or decide to stop production altogether, at least temporarily. Ukraine is a large transporter of raw materials such as aluminum and iron and these metals are essential for the construction industry.

If shortages appear, certain construction projects including building commercial and residential properties, highways and more could be halted. There is also a high possibility that certain construction companies might pull out from Russia and/or Ukraine altogether.

At US Framing, we strive to offer exceptional construction services to our customers. We specialize in framing and room additions for commercial and residential properties. Although the Russia-Ukraine war has massive global impacts, we will do our best to facilitate the development of new housing projects in the United States. Contact one of our specialists to learn more about our framing services today.