KPMG survey finds that cost reduction more important for transport companies than environmental issues

August 6th, 2011 by KPMG

For the vast majority of transport companies in Europe and the Middle East sustainability and environmental issues are currently less important business priorities, a survey from advisory firm KPMG has found.

The KPMG European Business leaders Survey – taking in views of over 1,500 executives across 15 sectors in 22 countries – found that only three percent of travel & transport executives feel that “working on the company’s approach to sustainability and the green agenda” is a priority. The majority of transport respondents said that “changing business operations to realize cost efficiencies” (60%) and “improving cash and working capital management” (42%) were the key issues for their companies at the moment.

However, 74% of respondents said that they will double their efforts to manage down their carbon footprint once carbon taxes are levied.

Dr. Ashley Steel, KPMG’s global head of transport commented “these results show that until the green agenda starts to have a real or perceived direct impact on the bottom line, industry executives will necessarily focus their efforts elsewhere. Improving cost efficiency is clearly the hot topic for transport companies which are all facing rising fuel costs. As fuel costs are largely uncontrollable, operators therefore focus on other significant cost items such as staff costs, engineering and IT.”

The third highest ranked business priority among transport executives is “exploiting growth opportunities through successful transactions” and two thirds of respondents anticipate more acquisition and bidding opportunities due to privatization.

Dr. Ashley Steel commented “squeezed public sector budgets in the Euro-zone is leading to the sale of numerous state-owned transport assets, such as airports, seaports, postal services as well as outsourcing rail and bus operations. For commercial operators, changes to previously state run transport systems offers significant opportunities which will lead to a changing industry environment and enhanced revenue generation opportunities.”

Deregulation, will shake up the bus, rail and postal sub-sectors. Aiming to create a Single European Transport Area, the European Commission is pushing for the introduction of mandatory competitive tendering of public transport contracts in national markets, whilst the European postal market is to be fully liberalized by 2013.

 

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