Resilience in the EPC Supply Chain Post Pandemic

By Carly Fields


Risk management for engineering, procurement, and construction (EPC) contractors has ramped up post Covid and shippers are rethinking past strategies to ensure project cargo logistics resilience.

Jamilya Garajayeva, logistics manager at Petrofac, noted the many challenges that the supply chain sector has faced since 2020, predominately caused by the global pandemic which created inventory imbalance, limited capacity, and led to worldwide port congestion and a reduced workforce. Added to that, geopolitical tensions such as the ongoing Russia–Ukraine and Red Sea conflicts have resulted in growing inflation, supply chain bottlenecks and pressure on freight rates.

“The pandemic was a game changer when it comes to risk analysis and formulation of mitigation measures,” Garajayeva said. “Traditionally, we were reliant on standard industry risk registers and lessons learned. But the pandemic voided many available mitigation options, reducing our capabilities to take decisions with calculated risks.

“We execute turn-key projects with durations extending up to 36 months or more. And one of the major risks EPC contractors are exposed to is the constant fluctuation in the freight index. The impact of this instability is a difficulty in forecasting logistics budgets,” Garajayeva said.

Petrofac recognized the imperative for a more resilient approach, focusing on flexibility and contingency planning. “We still had to deliver on our obligations and commitments to our clients. Therefore, there was a critical need for a transformation in risk analysis and mitigation studies,” she said.

Key to Petrofac’s strategy shift was diversification, particularly in logistics service providers (LSPs). Pre-pandemic reliance on single freight forwarders could prove precarious if disruptions occurred. Petrofac adapted by engaging multiple LSPs, eschewing long-term contracts for agreements with price adjustment mechanisms linked to industry freight indices.

“We have developed a completely new mindset that combines resilience and agility in order to navigate cost and demand fluctuations in supply chain. Resilience in the supply chain is becoming more and more important,” she said.

Garajayeva underscored the importance of intelligent planning, enhanced demand forecasting, and optimizing transportation routes not only for cost-effectiveness but also to align with environmental objectives in line with sustainability agendas.

“Improved demand forecasting aligns with our procurement project planning to better consolidate and understand inventory levels and move materials more accurately with actual demand, minimizing costs on unnecessary storage. We explore different transportation options and routes taking into account not only the cost but also our commitment to reduce any associated carbon footprint,” she said.


Petrofac is a member of the Breakbulk Global Shipper Network, an extensive networking platform for executives operating at the top end of the project supply chain in sectors such as oil and gas, energy and renewables, mining and minerals, construction, forestry, industrial manufacturing, and aerospace.

The next in-person meet-up for BGSN members will be Breakbulk Europe 2024 on 21-23 May at Rotterdam Ahoy.