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Peak Oil is You


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Page added on September 29, 2008

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Consumerist society fuels rising oil prices

The time has come to question our ‘need’ for excess


For some time it has been impossible to pick up a newspaper without reading about the soaring price of fuel. The increase has been truly dramatic due to a quadrupling of the cost of a barrel of oil since 2004. It is something that we all feel because of the impact that it has on our everyday lives.


What may be less obvious is that this same price increase has also been a major shock to the global supply chains that support commerce and bring most of the low cost products to the high street. Worryingly, the impact of the price hike is still working its way through those systems.


Worse still, as Martin Christopher noted in a recent article; high oil prices are here to stay and more significant price rises are inevitable. Furthermore, we may be approaching, or have already passed, ‘peak oil’; the moment when oil production enters a permanent decline. At the same time world demand continues to increase, so the gap between demand and supply will get bigger by the day and there is little realistic chance of it being filled with alternative energy sources for many years to come. This is very worrying for logistics and supply chain managers, as many of the strategic decisions taken in the past, such as where to manufacture or import raw materials from or how to distribute finished goods may not look so attractive in the light of limited fuel availability, its spiralling cost and concerns about our carbon footprint. Previous emphasis has been mainly on cutting costs to bring cheap goods to the high-street regardless of the consequences but there is a very real need to develop supply chains that use less fossil fuel.


Material Handling Magazine



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