Russia has destroyed 90% of Ukraine’s modern storage capacity. Retail logistics are being reshaped

Russian assaults have decimated approximately 90% of Ukraine's modern storage facilities, drastically altering the nation's retail logistics, stated Ukraine's Agriculture Minister Taras Vysotskyi on 28 August, as reported by Interfax-Ukraine. In recent weeks, Russia has increasingly targeted Ukraine's civilian commercial and logistics infrastructure, striking warehouses, distribution centers, hypermarkets, postal terminals, and other essential facilities.

These attacks have damaged supply chains and compelled businesses to adopt pricier and more vulnerable methods for storing and delivering products.

Vysotskyi emphasized that while the destruction does not pose a famine threat, continued Russian assaults on logistics infrastructure could impact the variety of products available in Ukrainian stores. Retailers forced to modify their delivery methods have been making "deliveries from the wheels" instead of utilizing traditional storage and distribution centers, a more complex and costly approach.

Some companies have even relocated their operations to other regions, but these relocated facilities have also become targets of Russian strikes.

Despite the extensive damage, Vysotskyi assured that Ukraine does not face a famine severe enough to endanger the population. The primary consequence will be on logistics, product availability, and the range of goods sold in stores. With fewer storage facilities, retailers have diminished capacity to stock products and must increasingly rely on direct deliveries, which can also raise costs due to the need for more frequent and potentially longer routes without the security of large distribution centers.

Vysotskyi called for a system to distribute financial risks when Russian attacks destroy goods along the supply chain, suggesting that these losses should be shared more equitably among the companies involved in supplying and selling products. He noted that different products have varying margins, sales conditions, and profitability, so the risk share should be tailored to the specific product and terms of cooperation.

The attacks on storage and distribution infrastructure are causing effects that extend beyond the facilities themselves, altering which products reach stores, raising delivery costs, and making Ukraine's retail system more susceptible to further Russian strikes.