The Economics of Artillery Shells in the Russo-Ukrainian War

The Economics of Artillery Shells in the Russo-Ukrainian War

 

Ukraine is firing ammunition faster than the west can produce them, and the same is true for Russia.  

Even though Ukraine will never run out of artillery shells, as there will always be some amount flowing in, this will have drastic adverse effects on the battlefield, because only priority targets will be hit due to the shell shortages.  

In a war where more than 70% of casualties result from artillery fire, whoever has the firepower advantage is more likely to win. No wonder there’s a race to increase artillery production as fast as possible on both sides of the conflict. And it’s not just artillery shells, it's also Javelins, GMLRS rockets, and air-defense missiles. Recently, the COO of Lockheed Martin, said that Ukraine consumes a year's worth of production for some munitions in just one month. 

But what this means for Ukraine in the long run, how much ammunition Ukraine actually needs, why it’s so difficult to increase the production rate of artillery shells, and why having more shells only solves part of the problem, is Not What You Think!

In March 2023, the Ukrainian minister of Defense Aleksey Reznikov said that  

Ukraine uses on average 110,000 units of 155 mm caliber shells per month.  

But he stressed that Ukraine can fire 594,000 shells per month, if the ammunition was available.  

This discrepancy between what is actually fired and what could be fired, means that over 300 western artillery systems that Ukraine has are sitting unused 80% of the time.  

That’s why Ukraine wants 250,000 artillery shells per month from the European Union alone. 

According to the Ukrainians, in order to achieve their battlefield objectives, they need at least  

60% of the full ammunition set, or 356,000 shells per month. If the EU were to provide 250,000 shells, the other 106,000 would have to be supplied by other western partners, primarily the United States.  But there's a problem.

The United States is currently producing only 24,000 155mm artillery shells which is up from  

16,000 shells produced in February 2022, prior to the Russian invasion. 

The reason that the US has such a low rate of artillery shell production is that munition production was tailored around the needs of the United States, which are not that high.  

Americans do not expect to engage in months of artillery duels. Instead, their primary focus is guided weapons delivered by aircraft. But recently, there was a shift in mindset in The Pentagon. The Ukraine experience shows that you cannot beat large quantities of Howitzers firing unguided shells. The unguided shells have been the cornerstone of the 18-month old conflict, since each day, thousands of shells are fired from both sides.

The artillery shells are basically giant bullets filled with explosives. Even though the United States is modernizing its ammunition facilities, it’s still a fraction of what it was during World War II, when they had 85 ammunition plants, compared to only six that exist today.  

Those six plants currently have an average age of 80 years and in many cases, they use the same equipment from the World War II era; cutting, heating, forging and bending steel into shape.  

Since the Russian invasion began, the Pentagon has invested billions of dollars to produce record levels of artillery shells, not seen since the Korean War in the early 1950s.  

By 2024, the United States wants to produce  

80,000 shells per month. That would be a 500% increase from prior to the invasion.

But that still is not enough, because there’s no way that Europe can produce 250,000 shells per month, at least not in the near future. Depending on the source, the EU currently produces anywhere between 20,000 to 55,000 shells of all types monthly.

Germany's Rheinmetall, the largest producer of artillery shells in the west, produces about 37,500 shells per month, and is planning to increase production to  

50,000 shells. Only 12 of the EU countries can produce 155m shells, plus the UK and Norway.  

The current EU goal is to boost its artillery production to 83,000 shells per month. Combined with American production increasing to 80,000, that would mean a monthly supply of 163,000 shell that can theoretically be sent to Ukraine. While it's a 50% boost compared to what Ukraine currently uses, it is still less than half of what Ukrainians say they need, a whopping 356,000 shells per month. And you may be wondering, is this number too much to ask?

Not really, if you consider that back in 2022, Russia fired between 20,000 to  

60,000 shells per day which translates to 600,000 to 1,800,000 shells per month.  

But in 2023, Russian artillery fire is down 75% because of their own supply issues.  

Nevertheless, by most accounts, Russia currently fires roughly 440,000 monthly rounds, at least four times more projectiles than Ukraine does.

The exact number of artillery shells that Russia can produce per month is unknown, but western estimates range from 20,000 shells to as high as 90,000 shells per month.  

According to Russian military bloggers, Russia produces 58,000 shells per month (, and then restores a staggering 141,000 of their old shells every month. This means that Russia can produce and restore about 6,500 shells per day, which is at least 3 times less than the 20,000 projectiles that the Russian military currently uses on a daily basis.  

The fact that Russian artillery fire is down compared to 2022, the news of Russia trying to buy shells from North Korea and ordering munition factories to work around the clock all points toward Russians experiencing a shortage of shells. With consumptions far exceeding production numbers, the shells could have only come from one source Stockpiles.

The United States doesn’t advertise the number of 155mm shells that it has in its arsenal. But what we do know is that the US has given Ukraine more than 2 million 155mm artillery rounds so far.  

 All those projectiles came from the old stockpiles, and now they are replacing their stockpiles with newly produced shells.

Judging by the news headlines, the artillery shell stockpile situation in Europe is dire.  

One source suggested that Germany only had 20,000 high explosive artillery shells left.

According to the NATO secretary general, Jens Stoltenberg, the allies so far have depleted their stocks to support Ukraine, which is unsustainable without ramping up production of weapons.  

At the current rates, Ukraine is burning through ammunition a lot faster than NATO countries currently manufacture. Massive industrial bottlenecks in manufacturing artillery shells and other weapon systems have resulted in a race of logistics against Russia.  

So what’s the bottleneck when it comes to the production of artillery munitions?

The raw materials do not seem to be an area of concern, since vast stockpiles of raw materials already exist, and there’s plenty of steel to go around. 

The biggest issue in ramping up production is acquiring or building the machine tools that are needed to produce munitions. No wonder some machinery that dates back to World War II is still in use to this day.  Lack of production lines is the challenge.

The western allies have also bought whatever leftovers of soviet-era weapons they could find on the market that include Grad artillery rockets and 152 millimeter shells.  

The soviet-era munitions are still produced by some small eastern European countries, but the numbers are so insignificant, that the only way to supply Ukraine, is to provide NATO standard ammunitions, like 155mm shells. For example, the most common American projectile is the M795.  

It weighs 103 lbs, is roughly 3 feet in length and houses 24 lbs of explosives. It has a maximum range of 23 miles and an accuracy of 456 feet.  Anyone within 150 feet of impact would likely not make it, and it could cause injuries as far as 400 feet away. Depending on its type, it could cost anywhere between $500 ,to $3000 for one unguided shell.

 

At any given time, it is estimated that about a third of western-made artillery systems donated to Ukraine are in for repairs. This may be the reason why Ukraine is only asking for 60% of the full ammunition set. The issue is mainly the barrel, which can only fire so many rounds.  

As a Howitzer is used, the wear and tear on its barrel reduces the range and accuracy over time.  

Eventually they need to be replaced, because there is also the risk of them blowing up. 

Barrels cannot be changed on the battlefield. They are up to 20 feet long and weigh thousands of pounds. Instead,  

Howitzers are frequently shipped to Poland where they are repaired and then sent back to Ukraine.  

According to the manufacturer, the barrels on Howitzers such as the M777, can last up to 2,500 rounds fired, but Ukraine says that each barrel has easily lasted over 10,000 shots.

The German made Panzerhaubitze 2000, has a barrel lifespan of up to 4,500 rounds, but at least one self-propelled Howitzer managed to fire over  

20,000 rounds from a single barrel. Nevertheless, Ukrainians still estimate that at any given time, at least 50% of Panzerhaubitze 2000 need some sort of repair.

It’s worth noting that the life of the barrel is determined by Effective Full Charge rounds, or EFC. If a Howitzer fires with very low charges at short range, it means that many more rounds can be fired safely without the barrel blowing up.

As you can see, it’s not just about flowing artillery shells into Ukraine. A constant flow of new barrels is just as important, without which no shells can be fired.  

This means that as more shells are being sent to Ukraine, the wear and tear on the barrels would reduce the accuracy to the point that more barrels also need to be shipped in.

Hitting a target with an unguided shell is difficult. You need to solve the gunnery problem which involves solving the challenges of hitting a target with indirect fire … or you could just use precision-guided shells like the Excalibur.

The Excalibur shell relies on the GPS.  The coordinates are programmed into the shell and the projectile guides itself to the target within a 6.5 feet accuracy.  

While it costs a whopping $100,000 per shell, it can do a job that will require between 10 and 50 unguided shells. Combine this with the limited lifespan of a barrel, and the shoot and scoot tactic, where you fire a single shell and immediately move away to avoid counter battery fire, and Excalibur’s exuberant price is suddenly justified.  

But the problem is quantity. Total production of Excalibur rounds is about 1,000 per year, and only 15,000 rounds are believed to have been produced to date. As of January 2023, it is estimated that the US has sent between 3,000  to 5,200 precision guided 155mm rounds to Ukraine.

The shortage problem also applies to many other munition types. About 8,500 Javelin anti-tank missiles were provided to Ukraine, but their annual production is only 1,000 units. When it comes to HIMARS GMLRS rockets, which cost $150,000 each, the situation is a little bit better.  

Currently the United States can produce around 5,000 rockets with a surge capacity of 10,000 per year. This means that theoretically, the United States can indefinitely supply a total of 400

GMLRS rockets per month for the 30 GMLRS launchers that Ukraine has. In contrast, the ATACMS long range ballistic missiles that can be fired from HIMARS, are in short supply since only 4,000 of them have been produced in the past two decades, and more than 600 have already been used. Lockheed  

Martin still produces 500 ATACMS per year, but all of them are shipped to overseas customers.  

This is why the Biden Administration is reluctant to provide them to Ukraine among other reasons.

All this raises a big question. How is it possible for Ukraine to fight an enemy that has four times the artillery power? The answer is effective counter-battery fire.

Counterbattery battle is essentially artillery destroying other artillery in order to significantly diminish the enemy’s firepower. The Army that prevails in counter-battery battle, is usually the one that prevails on the battlefield.  It does appear that Ukrainians are winning the counter-battery battle judged alone by the amount of videos posted online compared to Russians.  

According to one western count, while Ukraine suffers greater vehicle losses, when it comes to heavy artillery, for every big gun lost in Ukraine, Russia is losing three.  

That figure increased to four big guns since the start of the counteroffensive in June 2023.  

You see, beside limited precision guided munitions, western countries have also provided Ukrainians with counter-battery radars which detect incoming artillery shells and rockets and calculate their launch location, which makes it easier to fire back at them. Combined with aerial drones, counter-battery radars make it very difficult for the Russians to conduct artillery fire, forcing them to shoot and scoot before Ukrainians respond with counterbattery fire.

President Biden recently noted that the United States is temporarily providing Ukraine with cluster munitions until the US can increase its production of 155m shells. The issue with cluster munitions, is that even though they are incredibly effective at killing enemy forces on the battlefields, they are also incredibly effective at killing civilians once the war ends.  

That’s because the percentage of cluster munitions that fail to detonate upon impact, known as dud rate, can range from 2 to 40 percent.  

As a result, these duds can act like landmines and injure civilians long after the war is over.  

It is worth noting that Russia has been using cluster munitions since the start of the war.

In addition, regular unguided artillery shells can also fail to detonate upon impact, which will endanger Ukrainians for years to come. By some estimations, the Soviet 152mm artillery shells fail to explode 10% to 30% of the time. As of August 2023, over  

30% of the Ukrainian territory is contaminated which will take decades to clear. Ukraine is currently the most mined country in the world as  a result of landmines and unexploded ordnance.