Pricing expert at Pricefx says the war and economic sanctions are disrupting the way the world prices and purchases nearly everything as product supply chains tighten
CHICAGO, June 01, 2022--(BUSINESS WIRE)--The global economy, and Europe in particular, is feeling the impact of product shortages due to the conflict between Russia and Ukraine. Key chemicals that permeate the global product supply chain are sourced in these two countries. Pricefx, the global leader in cloud-native pricing software, urges businesses to consider advanced pricing strategies to sustain good customer relationships, respond to increasing cost pressures, and maintain margins during this time of extreme volatility.
Chemical and product shortages are impacting everyday items such as tires, catalytic converters and breakfast cereal. Here are some specific examples of chemical shortages the world is currently facing:
Carbon black is used in batteries, wires and cables, toner and printing inks, rubber goods, and especially in automotive tires. It improves the strength, performance, and ultimately the durability and safety of tires. Approximately 30% of European carbon black comes from Russia and Belarus or Ukraine. Currently, these sources are largely off limits. Alternative sources in India are sold out and the cost of sourcing from China is double that of Russia given the transportation cost increase.
Consumers can expect to see higher prices for tires due to these increased costs, as well as difficulty purchasing specific types of tires as they will be in short supply. Tire manufacturers should review their supply chain and contracts to understand their risk exposure, the value of supply certainty and how much they are willing to pay for this value attribute.
These three commodities are utilized in a large variety of industrial applications, but are critical to the automotive industry. All three metals are utilized to manufacture catalytic converters, which help to reduce the toxic emissions created by gas powered automobiles. Approximately 40% of the world’s palladium comes from Russia. As sanctions and boycotts have expanded, prices have risen to all-time highs. The scrap value or resale value of a catalytic converter has increased such that individual cars, trucks, and buses are now targeted by organized crime organizations.
Businesses need to be aware of gray market pricing, where products are legally or illegally procured in one country or region and sold in another. This practice allows companies to utilize a kind of arbitrage on cost and price that negatively impacts the manufacturer.
Manufacturers need to have systems to detect and address gray market pricing that occurs because of large differences between regional pricing which is further amplified by commodity shortages and price spikes. It is also important to consider price ladders to maintain proper relationships between new and remanufactured or other similar product hierarchies. These relationships, if not managed in lock-step, can create margin compression where relationships are not well maintained.
Fertilizer is required for crops around the world. The ammonia in fertilizer is most commonly made by combining nitrogen in the air and hydrogen from natural gas. About 40% of the natural gas and 25% nitrogen, potash, and phosphates in Europe comes from Russia; nearly half of global ammonium nitrate comes from Russia. To make matters worse, China has limited exports, including fertilizer, in favor of addressing domestic demand. Farmers are considering rotating to crops that require less fertilizer, however grain shortages are driving up the cost of basic foods.
Russia and Ukraine together make up about 25% of global wheat production. Ukraine is a major producer of sunflower seed oil, cereals, and is the fifth largest global grain producer. The combined impact of fertilizer product, grain and seed oil production is significant to the global economy.
Due to quickly rising costs, consumers can expect to see higher food prices. Food manufacturers will often employ "shrinkflation" to combat rising costs by reducing the quantity of product in a package. This can commonly be seen in breakfast cereal, where a 700g box is now a 650g box.
"After the global pandemic began in 2020, businesses learned that they needed to prepare for supply chain shortages but were likely caught off guard by the unexpected disruption caused by the Russia-Ukraine war," said Garth Hoff, chemical industry pricing expert at Pricefx. "These ‘black swan’ events are occurring with increasing regularity and impacting consumers in ways they aren’t expecting – like the size of their cereal box. Businesses, particularly mult-national companies, are being forced to once again adapt to massive disruption and need to reexamine their data, shift pricing algorithms, and look for ways to survive and thrive in 2022’s already challenging environment."
LinkedIn: https://www.linkedin.com/company/price-f-x-/
Twitter: https://twitter.com/price_fx
Pricefx is the global leader in SaaS pricing software, offering a comprehensive suite of solutions that are fast to implement, flexible to configure and customize, and friendly to learn and use. Based on cloud-native architecture, Pricefx delivers a complete price optimization and management platform that provides the industry’s fastest time-to-value and lowest total cost of ownership. Its innovative solution works for B2B and B2C enterprises of any size, in any industry, in any part of the world. Pricefx’s business model is entirely based on the satisfaction and loyalty of its customers. For enterprises facing pricing challenges, Pricefx is the cloud pricing optimization, management, and CPQ platform to dynamically Plan, Price and Profit.
For more information, please visit www.pricefx.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220601005208/en/
Media: Cathy Summers Summers PR for Pricefx cathy@summers-pr.com +1 (415) 483-0480
The relaunch will begin on Russia Day, a patriotic holiday celebrating the country's independence, at the same flagship location in Moscow's Pushkin Square where McDonald's first opened in Russia in January 1990. In the early 1990s, as the Soviet Union crumbled, McDonald's came to embody a thawing of Cold War tensions and was a vehicle for millions of Russians to sample American food and culture. The brand's exit is now a powerful symbol of how Russia and the West are once again turning their backs on each other.
Yahoo Finance's Julie Hyman breaks down leading business headlines regarding Facebook, Wells Fargo, and the battle over cricket media rights.
Intel is pausing hiring and placing all formal requests to create new positions in its client computing division on hold. The hiring freeze is not expected to affect the Atlanta expansion.
Los Angeles Capital CIO Hal Reynolds and Truist Chief Market Strategist Keith Lerner join Yahoo Finance Live to examine market sell-offs amid rising inflation and CPI data, defensive portfolio investing, the Fed's interest rate hike cycles, and spiking oil and gas prices.
Meta’s lawyers are investigating outgoing COO Sheryl Sandberg amid claims she misused company resources, The Wall Street Journal reports.
The Facebook parent’s lawyers have been investigating outgoing COO Sheryl Sandberg’s use of corporate resources for personal projects going back several years, people familiar with the matter say.
LOS ANGELES (Reuters) -U.S. President Joe Biden on Friday accused the U.S. oil industry, and Exxon Mobil Corp in particular, of capitalizing on a supply shortage to fatten profits after a report showed inflation surging to a new 40-year record. Biden, who came into office vowing to reduce U.S. dependence on fossil fuels, said on Friday he was hoping to speed up oil production, which is expected to hit record highs in the United States next year. But he also issued a warning to the industry, whose profits have jumped with oil and gas prices, pointing to the gains as evidence consumers are paying for more than higher labor and shipping costs.
Start saving up money because a bad recession could be nearing, warns one economic expert.
NEW YORK (Reuters) -Oil prices fell on Friday, after U.S. consumer prices rose more than expected and China imposed new COVID-19 lockdown measures. Brent crude fell $1.06 to settle at $122.01 a barrel. Both benchmarks still posted weekly gains, 1.9% for Brent and 1.5% for WTI.
Yahoo Finance Live examines several trending stocks from today's leading industry stories, including DocuSign's Q1 earnings miss and intent to slow down hiring, a UK antitrust group probing Apple's App Store restrictions, and Spirit Airlines' shareholders voting on the proposed merger with Frontier.
The money guru says too many people retire only with enough savings to last a few years.
President Biden took a swipe at Exxon Mobil but other companies make far more. On profits, Apple is by far the champ, followed by Alphabet.
After climbing more than 60% this year, energy stocks still have room to run. Six picks in the industry’s most promising areas.
Investors have some big questions ahead of the upcoming earnings update from Adobe (NASDAQ: ADBE). The cloud services specialist announces its operating results on Thursday, June 16, after the market closes. Shareholders will also learn whether challenges like inflation and slowing economic growth threaten management's bullish outlook for 2022.
Americans last month saw the biggest increase in their food bills in 40 years amid rising labor and energy costs, as well as global supply chain issues.
Retirees are staying in defined-contribution (DC) plans long after retirement, according to T. Rowe Price. DC plans are typically tax-advantaged accounts, such as 401(k)s and 403(b)s, offered by employers. Advisors should understand why employees stay invested in these accounts years … Continue reading → The post Here's Why Retirees Are Sticking With Workplace Retirement Plans appeared first on SmartAsset Blog.
Auto-safety regulator elevates investigation into Tesla Autopilot, Disney shakes up TV division as board throws support to Chapek, DocuSign tumbles after company cuts its outlook, and other news to start your day.
In this article, we will take a look at the 8 best tech stocks to buy according to Bank of America. You can skip our analysis of the bank’s overall outlook on the tech sector and go directly to the 4 Best Tech Stocks to Buy According to Bank of America. In a detailed note issued […]
After beginning the year at record levels, global events have caused market volatility to jump and equities to fall. The S&P 500 Index is experiencing its first major correction since 2020, so investors are understandably looking to safeguard their assets. … Continue reading → The post Schwab Says This Can Double Your Retirement Savings appeared first on SmartAsset Blog.
Barron’s exclusive analysis of gas stations shows which parts of the supply chain are—and aren’t—benefiting from $5 a gallon prices.