IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v15y2022i19p6934-d921729.html
   My bibliography  Save this article

Implications of Increasing Fuel Costs for Supply Chain Strategy

Author

Listed:
  • Beata Milewska

    (Institute of Management and Quality, WSB University in Poznan, Powstańców Wielkopolskich 5, 61-895 Poznan, Poland)

  • Dariusz Milewski

    (Institute of Management, University of Szczecin, 8 Cukrowa St., 71-004 Szczecin, Poland)

Abstract

The supply chain strategy has a significant impact on energy consumption. This strategy determines the location of individual links in the chain (suppliers, producers, distributors), which affects the costs of logistics processes, including, in particular, transport processes. Currently, due to the rapid increase in fuel prices, the issue of energy consumption in the supply chains is becoming increasingly important. The aim of the article is to present the impact of the increase in fuel and energy costs on the costs of logistics processes and, as a result, on the profitability of different supply chain strategies. The profitability of changing from global to local sources of supply as a result of rising energy prices was especially taken into account. The article presents the results of interviews from enterprises carried out by the authors and the results of simulations carried out using a model developed by the authors. The need to conduct such research resulted from the existing research gap and the need to take into account contemporary changes and conditions. The research was conducted in a period of rapid increase in fuel and energy costs. Both the research conducted by the method of interviews, as well as the calculations and simulations indicated that despite a very large increase in rates for transport services, especially in maritime transport, it is still not profitable to relocate production from the Far East to Europe.

Suggested Citation

  • Beata Milewska & Dariusz Milewski, 2022. "Implications of Increasing Fuel Costs for Supply Chain Strategy," Energies, MDPI, vol. 15(19), pages 1-14, September.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:19:p:6934-:d:921729
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/15/19/6934/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/15/19/6934/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. May McMaster & Charlie Nettleton & Christeen Tom & Belanda Xu & Cheng Cao & Ping Qiao, 2020. "Risk Management: Rethinking Fashion Supply Chain Management for Multinational Corporations in Light of the COVID-19 Outbreak," JRFM, MDPI, vol. 13(8), pages 1-16, August.
    2. Ancarani, Alessandro & Di Mauro, Carmela & Fratocchi, Luciano & Orzes, Guido & Sartor, Marco, 2015. "Prior to reshoring: A duration analysis of foreign manufacturing ventures," International Journal of Production Economics, Elsevier, vol. 169(C), pages 141-155.
    3. Gary Gereffi, 2020. "What does the COVID-19 pandemic teach us about global value chains? The case of medical supplies," Journal of International Business Policy, Palgrave Macmillan, vol. 3(3), pages 287-301, September.
    4. Daniel Hoehn & María Margallo & Jara Laso & Ana Fernández-Ríos & Israel Ruiz-Salmón & Rubén Aldaco, 2022. "Energy Systems in the Food Supply Chain and in the Food Loss and Waste Valorization Processes: A Systematic Review," Energies, MDPI, vol. 15(6), pages 1-15, March.
    5. Paul, Sanjoy Kumar & Chowdhury, Priyabrata & Moktadir, Md. Abdul & Lau, Kwok Hung, 2021. "Supply chain recovery challenges in the wake of COVID-19 pandemic," Journal of Business Research, Elsevier, vol. 136(C), pages 316-329.
    6. Jara Laso & Daniel Hoehn & María Margallo & Isabel García-Herrero & Laura Batlle-Bayer & Alba Bala & Pere Fullana-i-Palmer & Ian Vázquez-Rowe & Angel Irabien & Rubén Aldaco, 2018. "Assessing Energy and Environmental Efficiency of the Spanish Agri-Food System Using the LCA/DEA Methodology," Energies, MDPI, vol. 11(12), pages 1-18, December.
    7. Joakim Haraldsson & Maria T. Johansson, 2019. "Energy Efficiency in the Supply Chains of the Aluminium Industry: The Cases of Five Products Made in Sweden," Energies, MDPI, vol. 12(2), pages 1-25, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Beata Milewska, 2022. "The Impact of Instability in the Business Environment on the Competitiveness of Enterprises Using the Example of the Apparel Industry," Sustainability, MDPI, vol. 14(22), pages 1-23, November.
    2. Adrian Eugen Cioabla & Francisc Popescu & Timotei Bogdan Bacos, 2022. "Experimental Analysis for Determining Potential of Wastewater Sludge Mixed with Degraded Biomass as Substrates for Biogas Production," Energies, MDPI, vol. 15(22), pages 1-9, November.
    3. Beata Milewska & Dariusz Milewski, 2023. "The Impact of Energy Consumption Costs on the Profitability of Production Companies in Poland in the Context of the Energy Crisis," Energies, MDPI, vol. 16(18), pages 1-19, September.
    4. Gudivada Durga Bhavani & Ieva Meidute-Kavaliauskiene & Ghanshaym S. Mahapatra & Renata Činčikaitė, 2022. "Pythagorean Fuzzy Storage Capacity with Controllable Carbon Emission Incorporating Green Technology Investment on a Two-Depository System," Energies, MDPI, vol. 15(23), pages 1-34, November.
    5. Cenk Tufan & Şemsettin Çiğdem & Yunus Kılıç & Gökçen Sayar, 2024. "Agility and Resilience in Supply Chains: Investigating Their Roles in Enhancing Financial Performance," Sustainability, MDPI, vol. 16(17), pages 1-21, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. McIvor, Ronan & Bals, Lydia, 2021. "A multi-theory framework for understanding the reshoring decision," International Business Review, Elsevier, vol. 30(6).
    2. Wadim Strielkowski & Andrey Vlasov & Kirill Selivanov & Konstantin Muraviev & Vadim Shakhnov, 2023. "Prospects and Challenges of the Machine Learning and Data-Driven Methods for the Predictive Analysis of Power Systems: A Review," Energies, MDPI, vol. 16(10), pages 1-31, May.
    3. Koppiahraj Karuppiah & Bathrinath Sankaranarayanan & Syed Mithun Ali, 2022. "Modeling Impacts of COVID-19 in Supply Chain Activities: A Grey-DEMATEL Approach," Sustainability, MDPI, vol. 14(21), pages 1-21, October.
    4. Beata Milewska, 2022. "The Impact of Instability in the Business Environment on the Competitiveness of Enterprises Using the Example of the Apparel Industry," Sustainability, MDPI, vol. 14(22), pages 1-23, November.
    5. Rinaldi, Marta & Bottani, Eleonora, 2023. "How did COVID-19 affect logistics and supply chain processes? Immediate, short and medium-term evidence from some industrial fields of Italy," International Journal of Production Economics, Elsevier, vol. 262(C).
    6. Fernando Merino & Cristina Di Stefano & Luciano Fratocchi, 2021. "Back-shoring vs near-shoring: a comparative exploratory study in the footwear industry," Operations Management Research, Springer, vol. 14(1), pages 17-37, June.
    7. Fang, Da & Guo, Yan, 2022. "Flow of goods to the shock of COVID-19 and toll-free highway policy: Evidence from logistics data in China," Research in Transportation Economics, Elsevier, vol. 93(C).
    8. Jonathan H. Reed, 2022. "Operational and strategic change during temporary turbulence: evidence from the COVID-19 pandemic," Operations Management Research, Springer, vol. 15(1), pages 589-608, June.
    9. Grillitsch, Markus & Asheim, Björn & Fünfschilling, Lea & Kelmenson, Sophie & Lowe, Nichola & Lundquist, Karl Johan & Mahmoud, Yahia & Martynovich, Mikhail & Mattson, Pauline & Miörner, Johan & Nilsso, 2023. "Rescaling: An Analytical Lense to Study Economic and Industrial Shifts," Papers in Innovation Studies 2023/11, Lund University, CIRCLE - Centre for Innovation Research.
    10. Ali Zackery & Joseph Amankwah-Amoah & Zahra Heidari Darani & Shiva Ghasemi, 2022. "COVID-19 Research in Business and Management: A Review and Future Research Agenda," Sustainability, MDPI, vol. 14(16), pages 1-32, August.
    11. Priom Mahmud & Sanjoy Kumar Paul & Abdullahil Azeem & Priyabrata Chowdhury, 2021. "Evaluating Supply Chain Collaboration Barriers in Small- and Medium-Sized Enterprises," Sustainability, MDPI, vol. 13(13), pages 1-28, July.
    12. Silvia Cosimato & Roberto Vona, 2021. "Digital Innovation for the Sustainability of Reshoring Strategies: A Literature Review," Sustainability, MDPI, vol. 13(14), pages 1-16, July.
    13. Saurabh Pratap & Sunil Kumar Jauhar & Yash Daultani & Sanjoy Kumar Paul, 2023. "Benchmarking sustainable E‐commerce enterprises based on evolving customer expectations amidst COVID‐19 pandemic," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 736-752, January.
    14. Mohammad Ali Yamin, 2021. "Investigating the Drivers of Supply Chain Resilience in the Wake of the COVID-19 Pandemic: Empirical Evidence from an Emerging Economy," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    15. Paul, Ananna & Shukla, Nagesh & Trianni, Andrea, 2023. "Modelling supply chain sustainability challenges in the food processing sector amid the COVID-19 outbreak," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    16. Massimiliano Scopelliti & Maria Giuseppina Pacilli & Antonio Aquino, 2021. "TV News and COVID-19: Media Influence on Healthy Behavior in Public Spaces," IJERPH, MDPI, vol. 18(4), pages 1-15, February.
    17. Roberta Capello & Andrea Caragliu, 2021. "Regional growth and disparities in a post‐COVID Europe: A new normality scenario," Journal of Regional Science, Wiley Blackwell, vol. 61(4), pages 710-727, September.
    18. Delera, Michele & Pietrobelli, Carlo & Calza, Elisa & Lavopa, Alejandro, 2022. "Does value chain participation facilitate the adoption of Industry 4.0 technologies in developing countries?," World Development, Elsevier, vol. 152(C).
    19. Jill Juergensen & José Guimón & Rajneesh Narula, 2020. "European SMEs amidst the COVID-19 crisis: assessing impact and policy responses," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(3), pages 499-510, September.
    20. Das, Sanchita Basu & Sen, Rahul, 2022. "Trade Interdependencies in COVID-19-Related Essential Medical Goods: Role of Trade Facilitation and Cooperation for the Asian Economies," ADB Economics Working Paper Series 666, Asian Development Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:15:y:2022:i:19:p:6934-:d:921729. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.