39 percent of large German companies fear bottlenecks in their own production if deliveries are stopped.
(Photo: IMAGO/ITAR-TASS)
Dusseldorf The consequences of the war in Ukraine, which has now been going on for more than two months, are causing greater bottlenecks than expected in the purchasing departments of large German companies. 17 percent of the companies report delivery problems for steel and steel products, eleven percent have problems importing food raw materials. Wood and packaging are also becoming scarce.
In addition, more than every tenth company has its own logistics failures as a result of the war: Ukrainian and Belarusian truck drivers are absent, ports on the Black Sea are closed, and the railway connection between China and Germany is disrupted.
The results come from a survey by the Federal Association of Materials Management, Purchasing and Logistics (BME) among almost 100 large German companies, which is available exclusively to the Handelsblatt. In addition to all Dax corporations, members of the BME purchasing association are large and medium-sized family businesses, which together with a purchasing volume of 1.25 trillion euros represent one third of Germany’s gross domestic product.
“The war in Ukraine is hitting the German economy hard,” says Gundula Ullah, CEO of the BME. “There is almost no company that is not affected by it.”
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Companies also fear that the situation could get worse. In the event of a complete disruption in the gas supply from Russia, 39 percent of large companies expect their own production to come to a standstill. According to the purchasing managers surveyed, 61 percent of direct suppliers could be affected by a possible gas stop.
Purchase prices drive inflation
70 percent of the large companies surveyed report a shortage of raw materials and materials caused by the war in Ukraine. This causes the purchase prices to rise significantly: According to their own statements, 88 percent of the companies now have to bear higher costs.
The increased prices are passed on to their own customers for the most part, according to the companies. 75.3 percent of them answered the survey with “partly”, 11.8 percent even with “complete”.
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On the other hand, not even every tenth company rules out price increases. The buyers’ association BME warns: “An even higher inflation rate is therefore almost inevitable and will have negative effects on long-term economic development.”
The situation is already tense. As the Federal Statistical Office announced on Monday, retail sales rose by 2.1 percent in March compared to the previous month, but the increase was solely due to inflation. Price-adjusted revenues fell by 0.1 percent.
Large companies want to bring supply chains back to Europe
After many years of globalization, many companies are also trying to regionalize their supply chains again. 62 percent of companies are looking for replacements within the EU after delivery failures, 40 percent even within Germany. When switching to suppliers from other regions of the world, on the other hand, China only plays a minor role with 17 percent of the mentions. Even Turkey is currently in greater demand at 24 percent.
And many companies also want to fundamentally change their energy supply: 48 percent of the companies surveyed are now planning to invest more in sustainable energies because of the impending gas ban from Russia.
“This could mean a significant boost for renewable energies and more energy efficiency,” believes the BME. However, it should be noted that this is only possible at short notice in the rarest of cases.
Exodus of German companies from Russia
The companies also want to distance themselves significantly from the Russian market. “What is happening in Ukraine is leading to an exodus of German companies from Russia,” observes BME CEO Ullah. According to the survey, 42 percent of the companies plan to withdraw completely from the country, seven percent only want to use it as a procurement market in the future, and 21 percent only as a sales market.
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But even that quickly loses its importance. The American supply chain monitoring service Fourkites found that total Russian import volumes have fallen by 13 percent in the last four weeks – and are now 69 percent below pre-war levels.
With a minus of 76 percent, industrial imports are even more affected than the consumer goods market. In the port of Hamburg, operations are now being made more difficult by countless containers that were originally supposed to be shipped to Russia – but are now being held back for fear of sanctions.
Fourkites reports that Russia received 65 percent fewer fashion items, drinks and food from abroad in the past week than in the week before the war.
The boycotts by VW, Adidas, Ikea, McDonald’s, Obi and others are clearly having an effect.
More: Almost two thirds of all deliveries to Russia fail