fundamental changes in an energy constrained, low carbon world

TORONTO, Nov. 5 /CNW/ - Climate change, rising energy prices and increasing local sourcing are current and future challenges for the transport & logistics (T&L) industry, according to the new global survey: Transportation and Logistics 2030 by PricewaterhouseCoopers (PwC). "While respondents to the survey strongly disagreed with a statement that the price of oil will reach US$1000 per barrel, it does raise some thought provoking questions about how the scarcity of oil will impact this sector", says Todd Thornton, of PwC's Transportation and Logistics practice.

Over half of the respondents to PwC's recent survey of transportation and logistics executives across the globe predict an optimistic future scenario in which alternative energy accounts for up to 80% of their overall energy mix in some countries. The majority of global respondents see the reduction of CO(2) emissions and other emissions (such as nitrogen oxide and environmental noise) as a target in both the short and long-term. As well, nearly 70% of global respondents expect that by 2030 all emissions will be tracked in the supply chain and factored into the price of the product.

"Increased awareness of consumers about sustainability will alter behaviour and in turn, global supply chains," says Thornton, "Transport and logistics companies, driven by new regulations, will begin to face challenges in tracking, evaluating and documenting all emissions in order to measure the full environmental impact of their activities. When they do, these emissions will be factored into the price of products and could make doing business with these companies more expensive."

A number of the panelists surveyed believe that significant investments into alternative energy resources should lead to diminished importance of oil in the overall energy mix and a reduction in the demand for fossil fuels. While others believed that competition from new energy sources may lead OPEC to increase production, effectively keeping oil prices down. Overall, there was no general consensus about when or to what extent oil prices may rise.

The respondents overwhelmingly agreed that a massive hike in the oil price would have serious ramifications for the industry. Should oil prices soar to a four digit figure, regionalization of supply chains and relocation of production sites would be the consequence. If oil prices stay in the three digit figure range, it was agreed that global sourcing and transportation are still expected to provide reasonable cost advantages.