Poor transport links weaken prospects for emerging economies

20 May 2010

May 20 2010 | Andrea Klettner

Procurement professionals responsible for international sourcing have been warned it could take more than 20 years for transport infrastructure in emerging markets to reach standards set in the developed world.

A PricewaterhouseCoopers (PwC) report, Transportation & Logistics 2030, predicts bottlenecks in transport infrastructure will prevail in 20 years’ time, weakening the prospects of countries such as India in the international supply chain.

“Emerging countries are trying to catch up on transport infrastructure investment, which has been neglected for a long time,” said Pete Kauschke, global business development manager for transport and logistics at PwC.

“Companies see that the cost advantages of production in these countries is sometimes offset by increased logistics and reduced reliability.”

During the recession an increasing number of firms have shifted their buying power to Eastern Europe.

Kauschke added: “This trend could continue if emerging economies don’t invest in transport infrastructure. Of course labour is another aspect to consider, but transport and logistics ability could certainly influence a shift back.”

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