RISING GAS PRICES AND WHAT THAT MEANS FOR BUSINESSES AND CONSUMERS
March 24, 2022
by Skyler Smith
Since sanctions from the United Nations on Russia were set, the average price of Diesel in the United States has risen from an average of $3.97 a month ago to $5.10 which is a dramatic 22% monthly rise and a 39% rise over the past year. This, in turn, affects not only the individual but also logistics companies.
Logistics for small and large companies were already facing quite the challenge with the lasting impacts that the pandemic had. As companies looked to move forward from the pandemic, war with Russia will again test companies’ ability to pivot and make an adjustment based on what is most cost-effective. One potential means will come from options that do not burn as much fuel such as rail usage and updating systems to maximize energy efficiency such as renovating old HVAC, building idle-free trucking stations, and switching to electric dock equipment.
While transitioning to energy and cost-saving measures, it can be expected that we will see inflated costs for consumers continuing especially as the US is not the only country experiencing this rise in energy. The European Union was getting 25% of their oil from Russia and is now seeing fuel prices rising over 50% which is significant as half of the costs incurred for logistics are from transportation and shipping.
Whether it is being domestically shipped via roadways, put in a container and sent to the US on a container vessel, or flown in via cargo ships, the prices of fuel and goods are on the rise worldwide and trending upwards for the near future.