Rising gas prices aren’t just a headache when you fill up your tank; now they could start to ripple through the economy in ways you might not expect. Economists warn that if oil prices keep climbing, the cost of transporting goods could rise as well, and those costs often get passed along to the consumer.
Economist Chris Skerritt explains that diesel fuel powers the trucking industry, which moves over 70% of the U.S. freight tonnage. For trucking companies, fuel is usually the second-largest operating expense after labor. As fuel prices rise, those costs add up quickly.
“Higher fuel costs affect shipping and logistics,” Skerritt says. “Those costs then get passed on to consumers, especially for goods that travel long distances or require refrigerated transport. Food, perishables, (and) seafood are good examples.”
A one-cent increase in diesel adds roughly $390 million in costs to the U.S. trucking industry. In Florida, though, the rising cost of oil brings its own set of challenges.
“A lot of people come from outside to visit Florida by plane and other forms of transportation,” Skerritt notes. “If these prices persist into the summer, we could see fewer tourists, fewer hotel stays, fewer restaurant visits, fewer trips to theme parks.”
For small business owners, especially those around the beaches and St. Augustine, a dip in tourism could mean hard times. And as freight costs rise, grocery shopping could become more expensive, unless oil prices rebound quickly.
Skerritt warns, “We’ll see prices go up even further, which would make it harder for the average person to feed their family, pay their bills, and so on.”
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