The effect of the war between Ukraine and Russia is already being felt on international trade and e-commerce – with costs and supply chain problems likely to increase further in the future – Strategy and innovation

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The impact of the war in Ukraine is already being felt on international trade and e-commerce deliveries, while rising product costs and prices are expected to be felt in the future, along with supply chain issues. supply, according to a new analysis.

Parcel comparison website ParcelHero says the costs of the dispute, which is already directly affecting Ukraine and Russia, will be felt by UK businesses – even if they don’t trade in Eastern Europe themselves . Meanwhile, Kantar warns that food prices could rise further under the pressure of events.

The war between Ukraine and Russia began on Thursday morning when Russian troops invaded. This decision was followed in the following days by increasingly severe sanctions from countries around the world, including the United Kingdom. So far, they have included the banning of Russian air services from European, British and Canadian airspace – and vice versa. Shipments to ports in the UK and Europe are also affected by the sanctions, as are payments.

Effect on delivery services

ParcelHero says delivery services and container shipments to Ukraine and Russia have already been suspended, with items in transit being returned to sender where possible, while in Ukraine logistics companies asked employees to stay home with their families.

David Jinks, head of consumer research at ParcelHero, says, “It’s not just sales of physical goods in Russia that are being impacted.” He says that British, European and American companies operating electronic services in Russia are seeing their payments frozen after those countries removed some Russian banks from the Swift messaging network and froze Russian central bank assets. Bank cards issued by five Russian banks no longer work for Russian customers trying to pay for Netflix subscriptions or access Apple and Google payment services, for example.

Jinks says Etsy is waiving all fees owed by Ukrainian sellers, a sum of around $4 million, while eBay.com announced it has suspended its global shipping program service to Ukraine. Ukraine and Russia. The lack of Russian exports in areas such as textiles, pharmaceuticals, electrical equipment, machinery and transport equipment could all affect supply chains and costs.

Rising costs

“Beyond the immediate logistical issues for deliveries, UK businesses are likely to see their costs rise due to higher diesel and petrol prices,” says Jinks. “Even though the UK is nowhere near as dependent on Russia for oil and as in the EU, increased demand is driving up prices everywhere. For example, diesel is now at 154.72 pence per litre, according to the RAC Food retailers are expected to see higher prices The Russian-Ukrainian plains were once called ‘the breadbasket of Europe’ The region exports around a quarter of the world’s wheat and half of its produce from sunflower, such as seeds and oil. In addition, Ukraine sells a lot of corn to the world. Some analysts predict a doubling of world wheat prices.”

Kantar said today that food prices rose 4.3% in February and buyers would likely see prices rise again due to “continued supply chain pressures and the potential impact of the conflict in Ukraine”. Market research said take-out grocery sales fell 3.7% in the 12 weeks to February 20 compared to the same period last year, but were still higher by 3.7%. 8.4% to those of two years ago.

Online sales, Kantar said, accounted for 13.3% of all grocery spending, down 2.1 percentage points from last year as 835,000 fewer people bought groceries. online for the past four weeks as a result of the Covid-19 pandemic and closures for only a year. earlier, when 6.6 million shoppers purchased online, in total.

According to a report by the Vienna Institute for International Economic Studies, the 2014 minor conflict in Ukraine cost Britain an estimated £0.67 billion, according to ParcelHero’s Jinks. Although it is too early to tell what the cost of this war will be, Jinks said: “The current conflict is on a much larger scale and the economic sanctions imposed on Russia are much more severe, so expect Let these numbers be the tip of the iceberg.”

Ecommerce Europe, which represents the retail and wholesale sector in Europe, called on European leaders to consider how to mitigate the worst effects on European consumers from rising inflationary pressures. He adds: “For our part, retailers and wholesalers will do all they can, as they have done during Covid, to overcome any wider disruption resulting from the invasion and its fallout, and to ensure that European citizens continue to have access to their basic necessities. ”

Cyber ​​attack warnings

Meanwhile, a cybersecurity firm has warned that businesses could be at increased risk of cyberattacks after the invasion.

Mike Wills, director of strategy and policy at CSS Assure, says companies should make themselves as hard to hack as possible at all times – but now more so than ever. “From a strategic point of view”, he says, “there is a significant risk that Russia will seek to create instability in Western countries and, in particular, in the United Kingdom, in order to divert attention of the situation in Ukraine and bringing it closer, acute problems at home. Nowadays it is easier to achieve this virtually through cyberattacks. To achieve instability and distraction, we can find attacks targeting services we rely heavily on every day, such as healthcare, banking, utilities, water, transport infrastructure and supply chains.

He adds, “No company will want the association or the ignominy of being the weakest link. Although a security program cannot be established overnight, the best time to start is today. In the meantime, heightened vigilance and discipline are key to defending against a cyberattack. At a minimum, companies should consider resetting passwords in case they have already been hacked and allow access to web portals and email accounts, as well as reminding employees to think twice before opening or click on links in suspicious emails.

“Multi-factor authentication – which requires users to provide two or more verification factors to access a resource – should be implemented wherever possible, and software upgrades and patches should be up to date. Companies should also dust off, review and rehearse incident response plans so they know how to respond quickly to any attack and be able to minimize its potential scope and scale Finally, ensure that all critical information is backed up off the network in the event of a ransomware attack.

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