An analysis of the impact of the energy shortage on business logistics systems, and its implication for freight transport

Abstract

The energy crisis will probably affect business logistics systems in the U.S. economy in two ways: cost and service relationships between the various modes of freight transportation may change (as carriers seek to compensate for higher fuel prices and fuel shortages) or aggregate levels of production may change (either because of fuel and raw material shortages or reduced demand). As logistics decision makers seek to compensate for these changes, their transportation requirements may also shift. These shifts will not necessarily result in an improvement in energy utilization in the freight sector of the economy. Thus government policies may need to be developed to counteract the effect of such changes. This paper discusses these potential shifts, with specific reference to rail-truck competition, and recommends some changes in government policies in light of these conclusions.