Implications of Increasing Fuel Costs for Supply Chain Strategy

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.