"Oil at $1000 per barrel in 2030?" asks a recent PwC survey reporting on how
transportation and logistics companies will evolve

    
    Energy prices, climate change and regional sourcing will drive
    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.

The survey reports that nearly six in ten respondents believe that their home and work environments, will become more integrated, with travel distances diminished between both. Even 45% of the respondents expect a reduction in individual mobility compared to today.

Although 60% of those surveyed think that consumers will prefer locally produced products by 2030, respondents do not believe that there will be a complete reversal of globalization by 2030. However, 59% think that transportation costs will be the predominate factor in the location of future production sites.

A further finding was that more flexible and efficient usage of transport modes will emerge. The majority of respondents anticipate that autonomous and self-controlled systems such as agent systems and automatic guided vehicles will revolutionize freight transport. Sixty percent believe that larger means of transport will become more prevalent as a way of compensating for rising transportation costs; however necessitating the need for significant infrastructure investment.

Methodology

PwC surveyed 48 experts from 20 countries from five continents using an online RealTime Delphi method. Over a time period of six weeks the expert panel discussed and assessed different scenarios for the T&L industry in a multi-staged procedure. The panel was composed of C-suite representatives from prestigious global companies, subject matter experts in strategy, as well as experts from business associations and academics from the fields of logistics. The majority of participants (60 percent) were C-level executives.

For more information, and a copy of the study "Transportation & Logistics 2030 - How will supply chains evolve in an energy-constrained, low-carbon world?" please visit www.pwc.com/tl2030 or www.tl2030.com.

About PricewaterhouseCoopers LLP

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,300 partners and staff in offices across the country.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

SOURCE PwC

For further information: For further information: Kiran Chauhan, (416) 947-8983, kiran.chauhan@ca.pwc.com; Carolyn Forest, (416) 814-5730, carolyn.forest@ca.pwc.com

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