Oil has a role in every area of the shoe supply chain, and spikes in crude pricing over time means consumers will pay more for a pair of shoes. By #FootwearNews

According to a recently released study from the Footwear Distributors and Retailers Association (FDRA), the trade organization detailed the different areas of the shoe supply chain, and how the cost impacts in total might affect FOB, or freight on board, when the liability, ownership and cost of goods transfers from the seller to the buyer. It also cited to the Footwear Innovation Foundation’s Carbon Report, which noted that 47 percent of shoes produced globally are classified as “rubber [or] plastic.” Even shoes classified as textile or leather have exposure to oil prices.

Should oil hold above $90 a barrel for consecutive months, cost pressures will accelerate across the footwear supply chain with a reduced ability to absorb the increases. The FOB increase could range from 1.5 percent to 3 percent per pair by mid-summer for some shoes, with most increases starting in late summer imports for the Fall/Winter retail selling period. That FOB increase includes a 1 percent to 2.5 percent uptick in material cost increases for Tiers 4, 3 and 2 within four to 12 weeks plus a factory production increase to shoe companies ranging from 1 percent to 1.5 percent.