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March 11, 2022
Supply Chain Digest Flagship Newsletter


This Week in SCDigest

bullet Ukraine, the Economy and the Supply Chain Week 3 bullet SCDigest On-Target e-Magazine
bullet Supply Chain Graphic & by the Numbers for the Week bullet New Stock Index

New Chain Cartoon Caption Contest!

bullet Trivia      bullet Feedback
bullet New Expert Column bullet On Demand Videocasts



The Warehouse Management System Boot Camp 2022



Six-Part Educational Series Provides Learning

and Insight Needed to Achieve Project Success



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Supply Chain Graphic
of the Week


Soaring Food and Grocery Prices

This Week's Supply Chain Numbers

US Job Openings Continue to Exceed Workers
Diesel Prices Soaring
Walmart Canada Plans to Offet eCom Delivery CO2

Untuckit still Waiting for Winter Garb Orders


Feb. 2, 2022 Contest

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 This Week's SCDigest OnTarget Newsletter

Cartoon, Top SCDigest Stories of the Week

Six Ways Supply Chains Can Transform Packaging
These Trends Will Become Even More Important as Disruption Continues in the Packaging Segment


Linda Dunn

Director, Georgetown University's School of Continuing Studies

5 Steps to Reduce Your Risk of a Ransomware Attack

Security is a Journey, Not a Destination


Brian Jaenke

Director of Continuous Improvement LandrumHR Workforce Solutions

You should get a big prize if you can name the second largest US airport in terms of air parcel tonnage handled per year, behind number 1 Memphis.
Answer Found at the
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Ukraine, the Economy and the Supply Chain Week 3

I am still mentally caught up in the Russian invasion of Ukraine and its impact on the economy and supply chain in the near and longer term, so I am back here with a third look.


The amazing thing this week is how the impact of the Ukraine conflict is intersecting with already power trends around inflation and supply chain disruptions.




As the Axios web site put it this week, "Besides inflicting suffering on the people of Ukraine, Russia's invasion will also spread misery worldwide.

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Oil prices in terms of the global Brent Crude benchmark rose to about $130 per barrel earlier in the week, versus $98 at the start of the war, but then pulled back to about $109 per barrel at end of trading day Thursday.

The key question: where are they headed from here? And that depends on whether countries stop buying Russian oil, as the US is doing, and/or Russia cuts back its own oil exports to Europe to inflict some pain and send the price it receive per barrel even higher.

Earlier this week, an analyst from Rystad Energy's head of oil markets said if Russian oil exports are significantly reduced as noted above, the price per barrel could spike to as high as $240 per barrel this summer.

Let's hope he's wrong, as this would cause economic disaster. Of course, $130 per barrel already may be plenty enough to cause economic disaster.

Case in point: the national average for a gallon of gasoline surpassed $4.35 on Thursday, with California is leading the way with the highest state average of $5.67 per gallon.

Meanwhile, last week the average on the road price for a gallon of diesel fuel rose 74.5 cents, according to the weekly report from the Energy Information Administration. That is an all-time high jump for a single week.

Economist Rajeev Dhawan, the director of the Economic Forecasting Center at Georgia State University in Atlanta, told Transport Topics magazine that carriers "can handle $4 a gallon [for diesel], but if it goes to $5 a gallon, the business model for trucking companies and others - it won't work."

And of course rising trucking costs will impact the cost of about everything, either pushing existing inflation even higher, triggering a recession in the US - or both.

The Consumer Price Index rose an incredible 7.9% year over year in February, a four-decade high increase in a month, as reported by the Labor Department Thursday. It is the fifth straight month of inflation at 6% or higher. This is a disastrous development for the economy - and higher oil prices will stoke further inflation.

It may already be changing consumer behavior. Volumes at meat packing plants in the US are way down, suggesting consumers are already cutting down on expensive beef, as soaring gas prices reduce discretionary income.

The rise in food costs is of course a global phenomenon.

"The conflict in Ukraine is threatening global grain production, the supply of edible oils and fertilizer exports, sending basic commodity prices rocketing and mirroring the crisis in energy markets," Reuters reported this week.

As a result, a growing list of key producing countries is seeking to keep vital food supplies within their borders, banning or reducing how much can be exported. This will also push food prices still higher.

Russia and Ukraine are important suppliers of edible oils as well as contributing nearly 30% of global wheat exports.

Chicago wheat futures have climbed around 60% so far this year, pushing up the costs of key food staples such as bread. That would include sharp price hikes in some of the world's poorest and least stable countries, potentially igniting social unrest.

As the Axios web site put it this week, "Besides inflicting suffering on the people of Ukraine, Russia's invasion will also spread misery worldwide.

Earlier this week, the price of nickel on London Metal Exchange briefly jumped to a record high above $100,000 a metric ton, before falling back a bit. Still, the price nearly doubled.

Russia is the world's third-largest producer of nickel, a key ingredient in stainless steel and a major component in lithium-I on batteries. The price copper and other metals are also soaring, driving up the costs of many types of products to appliances.

A growing mass of companies, from Nike to John Deere to McDonald's and dozens of others are - for now at least - stopping sales and/or production in Russia. The absence of popular Western products will be quite a blow to young professionals in Moscow.

On the war itself, a research note from the global analysts at Bank of America warned that "there is no clear off-ramp for Russia" in the Ukraine conflict - meaning a way to stop the aggression without looking like it lost and stopping short of further aggression in eastern Europe and NATO countries.

The note added that trying to estimate the economic impact following Russia's invasion has been like "catching a falling knife."

There is a lot more, but think that is it for this week. I sure hope I am on a different topic next week.


And as I said previously, it now seems clear that a return to somewhat normal times after two years of pandemic-driven supply chain disruptions, wild price swings and more is now unlkely any time soon, prolonging these strange supply chain times for who knows how long.

Any reaction to Gilmore's comments? Have any of your own? Let us know your thoughts at the Feedback button (email) or section below


See as Web page/Printable Version

On Demand Videocast:

Understanding Distributed Order Management

Highlights from the New "Little Book of Distributed Order Management"

In this outstanding Videocast, we'll discuss DOM, based on the new Little Book of Distributed Order Management, written by our two Videocast presenters.

Featuring Dan Gilmore, Editor along with Satish Kumar, VP Client Services, Softeon

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On Demand Videocast:

The Grain Drain: Large-Scale Grain Port Terminal Optimization

The Constraints and Challenges of Planning and Implementing Port Operations

This videocast will provide a walkthrough of two ways to formulate a MIP, present an example port, and discuss port operations.

Featuring Dan Gilmore, Editor along with Dr. Evan Shellshear, Head of Analytics, Biarri.

Now Available On Demand

On Demand Videocast:

A Blueprint for WMS Implementation Success

If You Want a Successful WMS Project, You will Find the Blueprint in this Excellent Broadcast

This videocast lays out the keys to ensuring your WMS implementation goes smoothly, involves minimal pain, and accelerates time to value.

Featuring Dan Gilmore, Editor along with Todd Kovi of Radix Consulting and Dinesh Dongre of Softeon.

Now Available On Demand


Feedback will return next week.

You should get a big prize if you can name the second largest US airport in terms of air parcel tonnage handled per year, behind number 1 Memphis.

A: Ted Stevens Anchorage (Alaska) International

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