Wednesday, 27 August 2008

Fuel Price Impact on Logistics

In another interesting survey, Eyefortransport has investigated the impact of increasing fuel prices on the logistics industry in the US. What's interesting is that with coming climate change legislation imposing additional carbon taxes, the survey results can be seen as an indication of things to come. The full report can be obtained here.

There were a number of changes to logistics systems that were envisaged as a result of higher fuel prices and the chart below shows the responses to each. They range from almost 60% who see inventory costs being pushed closer to the final destination, rather than minimising costs by moving goods through the supply chain as quickly as possible, to 11% who are exchanging commodity products with competitors in order to reduce transport costs.

Clearly this has huge implications for logistics solutions, which will need to be expanded, extended and re-configured. Indeed, 45% of respondents cited information systems as a key function to counteract volatile oil prices. IT was in fourth place after transport, inventory management and fleet management.

There are great opportunities here for IT companies with logistics solutions. According to PAC the largest companies in the transport/logistics sector worldwide are EDS and IBM, with T-Systems in a distant third place. HP's acquisition of EDS, which was finalised yesterday, puts them in a great position to benefit from this Green IT sector.

© The Green IT Review

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