The abrupt collapse of the Russian currency also affects Dutch logistics companies, even if they do not do business in Russia.
All-time low
The value of the Russian currency, the rouble, fell by more than 20 per cent this week. On Tuesday, it took no fewer than 80 roubles to buy one dollar. The Ministry of Finance has now resorted to crisis measures, such as selling off foreign currency reserves. For many companies, this is music to their ears, as they hope to capitalise on Russia’s weakened position. However, the fall in value may also have negative consequences for the Dutch supply chain. Below, we outline four negative and positive consequences you may experience as a result of the currency depreciation.
1 – Domino effect
The collapse of the Russian economy is not, at first glance, a cause for concern if your company has no operations in the country. However, there is a risk of the so-called domino effect. Small countries such as Ukraine and Moldova are heavily dependent on the Russian rouble. The economies of larger countries such as Kazakhstan, Poland and Belarus are also closely linked to Russia. The entire region is feeling the effects of the currency’s decline. And that is bad news if you do operate in that part of Europe.
2 – Lower fuel costs
The depreciation of the rouble is entirely attributable to the collapse in oil prices. After Saudi Arabia, Russia is the world’s largest oil exporter. Oil prices are currently very low, which is causing Russia considerable damage, but is leading to a fall in fuel prices. Transport costs are therefore falling sharply.
3 – Currency depreciation makes pricing difficult
Apple closed its Russian website today because the value of the rouble was fluctuating sharply, making pricing almost impossible. Car manufacturers such as BMW and Honda are also reportedly unwilling to sell in Russia for the time being. If even a multinational like Apple is struggling with this, the average supply chain operator will also need to think carefully about what prices to charge for their services. How do you determine how much something costs if the exchange rate could fall or rise sharply again the very next day?
4 – Reduced transport
Apple, BMW and Honda are the first to do so, but there will undoubtedly be more brands and companies following suit by temporarily pulling the plug on their Russian trade. This means less cross-border transport to countries in Eastern Europe, and logistics service providers there are feeling the effects.
Editorial LogistiekProfs
