The Economic and Environmental Analysis of a Petrochemical Distribution Network

The structure of a company’s distribution network is of vital importance for competitiveness but also involves considerable costs. In recent years, competitive pressure as well as regulatory measures, especially in the European Union, have also raised awareness towards the environmental impact of supply chain activities. However, activities associated with the distribution of products are not yet subject to environmental regulations but this might change in the near future. Therefore, companies will have to consider not only economic but also environmental aspects in the design of their supply chains. Based on a case study from the petrochemical industry we present a way to evaluate (strategic) distribution network design decisions, taking into account economic as well as environmental criteria. The results of the analysis show a clear trade-off between (distribution) costs and transport carbon emissions.