Sourcing Strategy for Asphalt Production Feedstock Considering Multimodal Transport Options
Author/Creator
Bridgelall, Raj
Lee, EunSu
Talegani, Ali Rahim
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This paper examines the logistics and distribution channels for importing heavy crude oil, which
is a source of bitumen. The study conducts a sensitivity analysis to assess the suitability of
existing or new distillery locations based on the available transportation modes and carrier
options. The model accommodates rate changes based on multimodal shipping rates, import
taxes, and other factors to assess the effects on total cost, schedule, and risks. Although a
strategic location near direct pipeline options using existing facilities could yield the least
transportation cost, the lack of pipeline capacity with increasing demand and delays in building
additional capacity weighs heavily against pipeline options. The analysis points to multimodal
shipments via ocean vessels and pipelines as the least-cost solution for a proposed strategic
location for the distillery, but other factors such as strained international relationships make them
less attractive. Depending on the selected refinery location, the analysis found that railroad
options present a viable alternative and could potentially lead to the best overall logistical
solution for obtaining asphalt production feedstock.