The Rising Cost of Gas

Every time we go to the gas station, we see our hard-earned money go down the drain.  The price of gasoline has drastically increased and even though our vehicles have become more fuel efficient we still have to pay a premium to stay on the road.  Major automotive manufactures have started to focus on electric cars; however, it will take time for them to become mainstream.  Additionally, not everyone has the money to buy a new electric vehicle.  In the meantime, we are stuck having to adjust our budget to the rising costs of fuel.  This problem is not unique to us and our households.

Freight and Deliveries

The single largest expense for American business is transportation.  It is expensive to get raw materials delivered, it is expensive to ship out completed orders, and it is expensive to move product and resources between facilities. Additionally, the American interstate highway system is one of the largest and most expensive government projects in history.  Monitoring, policing, and maintaining these transit routes is a never-ending job and cost an overwhelming amount of money.  The current times has only made these expenses cost even more.  When the cost of fuel rises so does the cost of shipping, receiving, and maintaining the highway system.  If we must stick to a budget, we must find ways to cut down of transportation needs and find ways to be more fuel efficient. 

Price Increases

Everywhere we look companies are increasing their prices. It does not matter if you sell food, home products, or even preform service work the cost of everything is increasing and this is partially caused by the raising cost of fuel.  Companies are forced to increase prices to stay profitable when expenses increase.  Most businesses raise prices only as a last resort, but there are only so many ways to increase efficiency to offset price increase.  The two easiest ways to combat price increases are to raise costs or to cut payroll.  Cutting payroll can create other logistical and employee moral problems on top of the poor public image downsizes a workforce cause. Therefore, we often get sticker shock every time we go to the grocery store, or we go shopping.  Inflation has been on the rise and the transportation industry, more specifically the rising cost of fuel, has had a direct impact on this.

Work Force Shortage

There is one more major factor on the recent inflation pattern we have seen.  That is the national workforce shortage.  Many companies are short staffed, and this has created a wage battle to attract new and better employees.  This increase in wages can be considered a good thing because it is helping to raise the income of many families throughout the country; however, this also has impacted prices.  Like with the cost of fuel when the cost of labor increases companies are forces to raise prices to compensate.  Furthermore, the workforce shortage has slowed down the transit of items.  Companies struggle to get products delivered on time because the transportation industry is struggling to find employees.  Both shipyards and trucking companies are facing labor shortages, and this means product is sitting and waiting to get unloaded and delivered for longer periods of time. This problem has been going on for several years now and even though businesses have reacted to cope with the current situation it is still causing delays. 

Fixing the Future

Working from home and other recent workplace changes has drastically help offset the rising costs of labor and fuel.  Companies can save money by investing less in large complexes and use some of that savings to offset the increase in other expenses.  That being said, cutting back in other areas like commercial storefronts can only help save a limited amount of money.  Until we, as a country, find a way to replenish the workforce, become less dependent on fossil fuels, and to become far more efficient we will see the trend of inflation continue.  However, as technology progresses, and we move more toward electric vehicles and other ways to reduce the use of gasoline the effect of gas prices should begin to decline.  We have already started the processes of technological evolution and as we get better at reducing the need for fuel, we should see the economy begin to change.  America has always found a way to overcome obstacles, and this is only a hurtle in our way.  We will weather this trend of inflation and we will once again build and maintain the best economy in the world.