Challenges the Conflict in Ukraine Poses to the E-commerce Shipper

The conflict in Ukraine has dragged on for over two dismal weeks now, with no clear end in sight. The loss of life is horrendous, and the impact can be felt worldwide from the constant news updates to the staggering cost of oil and gas. For small and medium sized businesses you are likely horrified at the catastrophic loss of life, but you may also realistically wonder how the conflict will impact your business. Today we will be breaking down the impact of the war on e-commerce businesses, looking primarily at the example of large retailers to inform smaller companies.

What the Large Companies Are Doing

Increasingly, large retailers are responding to the conflict and isolating Russia, with services having already halted in war-torn Ukraine. Retailers and restaurant chains from McDonalds to Starbucks are closing their brick-and-mortar stores in Russia. Some brands are also completely suspending e-commerce delivery to Russia, such as Nike. Payment firms like Mastercard and Visa have halted use of their credit cards in Russia, leaving thousands of Russians without access to their funds. Some large retailers are also selling business units based in Russia, and some companies are having to navigate what to do for teams they have based in Ukraine or Russia. These are just a few of the numerous complications the fighting is causing for businesses, and one of the things all these complications have in common is an increase in costs or lost revenue for companies.

These are just a few of the large retailers and companies that are significantly altering their operations because of the ongoing conflict, and there are many other actions being taken across the globe.  

The Impact on SMB E-commerce Companies

If you have supply chain operations or teams based in Ukraine and/or Russia, you have already been dealing with the rapidly evolving situation. Your business can expect to be impacted in a significant way if supply chain operations are based in either Ukraine or Russia, or if a large quantity of your products are sold there. However, regardless of the previously mentioned situations, your business is likely to feel the impacts of the conflict through increasing costs for carriers that will be passed on to the shipper. Gas has hit an all-time high, FedEx announced a new surcharge because of the conflict, and UPS has stopped operating any cargo planes over Russia, complicating the route for shipments to and from the Asia region. These are likely only the beginning of a quickly shifting e-commerce landscape.

In this situation where there are new updates every day, the key is staying informed without developing a negative relationship with the news cycle. Be aware of upcoming costs and plan accordingly. If you have ideas or strategies that are working for you or have worked for you in the past during times of global upheaval, leave them below in a comment!