1. INTORDUCTION
Supply
chains play an important role in global trade and products flow. They connect
the stages of production and distribution to move goods from one point to
another. From the raw materials to the delivery of final products to the final
consumers, supply chains handle a wide range of activities to minimize the
costs and time optimization. Supply chains also play an important role in
sustainability by adopting eco-friendly practices, supply chains preserve
resources and values creation. Supply chains not only simplify global trade,
but also motivate innovation, sustainability and economic development.
Given the importance of supply chains and their
relevance at all levels, it is natural to face many challenges and difficulties
that may affect the smooth arrival of goods and services. Decision makers, suppliers, exporters, and
researchers play an important role in studying challenges, overcoming
obstacles, proposing foundations for avoiding risks, and studying alternative
solutions to ensure the availability of supplies to markets and consumers
(industrialists and individuals).
To go into the topic more deeply, any issue or
disruption in the systems of supply chains and transportation of goods from one
point to another will result a significant impact on the global trade flow and
the availability of products to various countries, targeted sectors, and even
individuals.
Here we can see some of the direct and indirect
effects, including:
o Shipping
cost have will increase significantly, which causes significant impacts
o on
transportation and products movements costs on consumers.
o Higher insurance
and other associated cost
o Economic
and social impacts by reducing the availability or arrival of products to
consumers, which led to an increase in inflation and the cost of living.
2. STATEMENT OF THE PROBLEM
This research will explain the tension
occurring in the Red Sea region and its impact on the availability of energy
supplies and supply chains, as we are currently seeing signs of a potential of supply and energy crisis, which is briefly listed
as follows:
·
A large percentage of crude and petroleum
products pass through the Red Sea on the ships’ journey from east to west or
vice versa, and disruption may delay the delivery of products to their ports,
which might result a shortage in supply and the rise in energy prices, which in
turn affects industrial and living costs and whole global trade balance.
·
Most Saudi exports from the Arabian Gulf region
use the Red Sea region as a route
·
We have also begun to see a significant
increase in shipping cost due to the costs associated with insurance, military
protection, and changing routes to take a longer route, which increases the
costs. (Via cape of good hopes)
·
Environmental impacts by burning more fuel due
to doubling the shipping route, which may reach an additional 22 days for some
destinations.
In this study, I will analyze and review the
dimensions of the red sea issue and its severe impact on supply chains and the
availability of sufficient supplies for consumers without interruption. We will
study the expected increased costs of shipping and other costs, and we will
suggest alternative solutions to avoid potential obstacles.
Risk Mitigation Proposal;
This study will shade light on the possibility
of constructing a pipeline parallel to the current one, using the same campus,
to carry out the refined products from east to west (the Arabian Gulf region to
the Red Sea, such as the port of Yanbu, for example) to export directly to the
target European and US markets in a safer, more efficient, and less risky way
than the area of possible attack or supply interruption.
The costs of
establishing this path, its feasibility, and the potential positive results
from its implementation and use will be studied and evaluated.
THE PROJECT
SUBJECT WILL BE:
Navigating Global Supply Chain Risks: Analyzing
the Impact of Red Sea Tensions on Refined Product Flows and Exploring
Alternative Solutions
3. LITRETURE REVIEW
Global supply chains are more risky than
domestic supply chains due to numerous links interconnecting a wide network of
firms. These links are prone to disruptions, bankruptcies, breakdowns,
macroeconomic and political changes, and disasters leading to higher risks and
making risk management difficult.
Risk management plays a vital role in
effectively operating supply chains in the presence of a variety of
uncertainties (Ho, W., Zheng, T., Yildiz, H., & Talluri, S. (2015).
In this research, I will study the impact of
supply chain problems and the availability of supplies on consumers and
producers in terms of costs and the reliability of energy availability and
their impact on all sectors.
Then I will study the idea of constructing a
pipeline parallel to the current one from east to west to avoid passing through
the place of regional tensions (Red Sea). I will study the costs and the
potential feasibility cost and its positive impact on the economy and ensure
the smooth transfer of supplies to all countries of the world as the Pipelines
have been proved to be an efficient and economical way to transport oil
products.( Boschetto, S. N., Magatão,)
4. METHODOLOGY
In this project,
I will study the possibility of constructing a pipeline parallel to the current
one, using the same campus, to carry out the mission of transporting petroleum
products from east to west (the Arabian Gulf region to the Red Sea, such as the
port of Yanbu) to export directly to the target European and American markets
in a safer, more efficient, and less risky way than the area of possible attack
or supply interruption.
We will
study the costs of establishing this path, its feasibility, and the potential
positive results from its implementation and use.
To
obtain the necessary input, we may need to communicate with some specialized authorities
(if possible) or rely on open sources by exploring them by conducting an
estimated theoretical feasibility cost study in order to apply them to this
research.
5. ANALYSIS PLAN
After analyzing and studying this topic, the
idea of establishing a pipeline parallel to the current one will be studied and
the potential opportunities will be analyzed in terms of economic benefits and
how to avoid risks.
6. project finance
I will study the cost of the project, how to
finance it, and what its sources are
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