Warehousing and the distribution map

Distribution network design is a question every company entering a large country has to answer, and Ukraine is large: roughly a thousand kilometres across in both directions.

The classic structure

Before 2022, most national distribution ran through a central warehouse in the Kyiv region, feeding regional depots or shipping directly to customers.

The logic was straightforward: the capital is central, it holds the largest consumption, the road network radiates from it and modern warehouse capacity was built there.

What changed

Concentration in one location became an obvious risk, and companies split stock. A second warehouse in the west — around Lviv or Volyn — became standard for anyone serious about continuity.

The western location also serves the import function: goods entering from the European Union can be received, cleared and stored close to the border rather than trucked to the centre and back out.

Available modern capacity in the west was limited, which is why rents rose sharply and why several logistics parks were built.

How to think about the trade-off

Two warehouses cost more than one: more rent, more staff, more stock held in total to cover the same service level. That is a real cost and it buys resilience and shorter delivery times in the west.

The calculation is not sentimental. Model the cost of a week of disruption at a single site and compare it with the annual cost of the second site.

The practical advice

Hold safety stock in two locations even if you operate one. A pallet position rented in another region is inexpensive insurance and it is the cheapest continuity measure available.

Where stock sits determines working capital more than it determines delivery time — and the trade-off between the two is a decision I take again every year. The warehouse map moving west improved security and lengthened delivery to the eastern customer. The right answer is not a single hub; it depends on how many days you have promised to which customer.