Trucking industry feeling effects of rising fuel prices
ROANOKE, Va. (WDBJ) - In a world that’s constantly on the go, the cost that goes along with transportation is raising concerns.
“Oil prices are one of those interesting prices because they’re really based on what people think is going to happen with the oil market, so they’re very forward looking,” said Thomas Duncan, an associate professor of Economics at Radford University.
But looking ahead right now, especially for companies that offer freight service, the numbers are far from ideal.
“On a weekly basis we burn about 23,000 gallons of diesel, both on the road and here in the yard, and just in the last week the increase in diesel prices has added about $23,000 weekly to our cost, which on an annual basis is $1.2 million,” said Warren Groseclose, the CEO of Lawrence Companies.
Groseclose said that extra cost is absorbed by customers, adding an additional four percent to what they normally pay for shipments.
“So the question is how long can they sustain that? How long can the American consumer sustain that?” posed Groseclose.
Duncan predicts there to be other price hikes.
“Oil and gas is really important to the supply chain, so we’re probably going to see prices for other items begin to rise. So I wouldn’t be shocked to see some of that supply chain that wasn’t in great shape, impact your local grocery stores,” said Duncan.
He says it could also impact the travel industry, one that has suffered greatly for the past two years during the pandemic.
As for when prices will stabilize, that’s not yet known.
“What’s gonna happen over the long run, that’s really gonna depend on the signals that are being sent from the remainder of Europe,” said Duncan.
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