Supply chains have seen drastic changes due to the hike in fuel prices in the last 5 years. These have often been so bad that logistics companies have been forced out of business, and those working within the same areas have had their profits hit hard. The price of oil globally will only increase in the future, putting more supply chain companies in jeopardy, so is there a way to avoid this inevitable slump?
People have argued for several different solutions from changing the mode of transport to relying on just one of the existing methods. However, the argument against all of these is simply that oil will run out, period.
Perhaps it is time for supply chain leaders to begin looking at adapting their existing fleets be it on land, air or sea to sustainable fuels.
At this point people argue about the cost of development and implementation and that it is not good ROI. I argue that the ROI of this is still having a business in 15 years time.
Looking at this from a purely economic standpoint, not only will there be savings on the cost of fuel as the government do not tax bio fuel to the same extent as regular fuel, but there will also be green incentives available. This can see, in some countries, a saving of 40% on yearly business taxes, this saving alone in larger companies could pay for the research and implementation.
Although the likelihood of this happening on a wide scale are slim, those who adopt these ideas early on, such as COMAC (Commercial Aircraft Corp of China) and Boeing China will see the initial investment paying huge dividends in the future.