Abstract Different future scenarios can be evaluated using computer simulation. This chapter illustrates that changes in the northern Baltic Sea region due to sulphur regulation were driven by speed and other cost items rather than purely freight cost. If the cargo has some value, price erosion and cost of inventory holding represent significant financial burdens in supply chains. These short lead time smart solutions do not experience significant problems if CO2 emissions are put under some payment scheme (since distances are not excessive, even if trucks are used). However, for the global 2020 change and within continental supply chains, speed is not alone the answer. Air freight supply chains emit so much CO2 that payment schemes would have a significant impact upon these chains. An alternative would be to use more hinterland transport (railway) between Asia and Europe and this seems to be a lucrative suggestion—it emits low levels and is also relatively fast since it also reduces total costs. Container shipping supply chains are in a difficult position since their lead time is already high and causes harm to cargo owners. This chapter also incorporates a simulation model to assess sulphur regulation cost effects, in which different factors can be taken into account to analyse what the impacts might be on freight prices.
Simulation of Different Supply Chain Strategies
2018-09-11
22 pages
Article/Chapter (Book)
Electronic Resource
English
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