Key findings from the Transportation & Logistics industry

PwC’s 21st CEO Survey: The Anxious Optimist in the Corner Office

A newfound confidence

In the space of a year, transportation and logistics (T&L) CEOs have swung from pessimism about the macro economy and their own companies’ growth prospects to strong optimism, as increased economic activity, passenger travel, and shipping volumes help balance their concerns about terrorism, cyber threats, and political instability.

T&L CEOs also have their worries, of course. They see the world moving toward multiple political and economic systems and regulatory regimes amid rising nationalism. In addition, CEOs of T&L companies involved in passenger transport are especially concerned about terrorism. In general, T&L CEOs feel a sense of urgency about updating their legacy IT systems, which have suffered from a lack of investment in recent years and are more vulnerable to cyber threats than newer systems.

Nonetheless, despite political and social conflict that they can’t afford to ignore, T&L CEOs see their sector moving into a strong growth phase. That marks a big change from previous years, and it’s one they welcome.

Newfound optimism

Perhaps the most striking finding from PwC’s 2018 survey of T&L CEOs is their high degree of confidence about growth. Fully 60% of T&L CEOs said they believe global economic growth will improve in the next 12 months, more than the global average of 57%. And 45% of T&L CEOs said they’re very confident that their companies will grow in the next 12 months. This is markedly above the confidence level expressed by T&L CEOs in 2017, when only 32% said they were very confident their companies would grow in the coming 12 months.

Underlying the general sense of optimism are favourable economic conditions in the sector’s three most important markets— the US, China, and Germany, in that order. 

New threats emerge

Another striking survey finding is the degree to which over-regulation has receded as a CEO concern. Thirty-nine percent of CEOs responding to last year’s survey said they were extremely concerned that over-regulation would threaten their growth plans. This time around, only 33% said they were extremely concerned about the issue. Other issues, in particular terrorism, have moved to the forefront, with 45% of T&L CEOs citing terrorism as a threat to their companies’ growth prospects, compared with a global average of 41%.

Meanwhile, a growing number of T&L CEOs have come to view environmental damage and climate change as significant threats. This year, 41% of CEOs said they were extremely concerned about the issue, compared with the global average of 31%. This heightened concern likely reflects mounting pressure from stakeholders to reduce the environmental impact of their operations.

Going digital – slowly

Concern over cyber threats is growing. CEOs in the sector recognise that their legacy systems are far more vulnerable to cyberattacks than newer technologies, and the passenger transport sector, well aware that a single attack could cripple the business, is taking the lead in modernising its tech.

Complicating their efforts is an acute shortage of digital talent—a chronic concern in the industry. Seventy-eight percent of T&L CEOs report that they’re concerned about the availability of digital skills for their own workforces. The same percentage of T&L CEOs say they’re concerned about the availability of digital talent for the industry as a whole, and 58% say they have difficulty attracting digital talent, well more than the 50% global average. In response, many T&L companies are modernising their working environments and introducing new, more flexible ways of working.

Contact us

Jonathan Kletzel
Transportation & Logistics Leader, PwC United States
Tel: +1 (312) 298 6869
Email

Charles Johnson-Ferguson
Transport & Logistics Leader, PwC United Kingdom
Tel: +44 (0)7841 561 340
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Alan Ng
China and Hong Kong Transportation and Logistics Leader, PwC China
Tel: +(852) 2289 2828
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Dietmar Prümm
Transportation and Logistics Leader, PwC Germany
Tel: +49 211 981 2146
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