Transportation executives expect higher fuel costs over the next business cycles of 18 months, three years and five years, despite some economists’ projections that price rises will be moderate or flat, according to a recent study.
Sixty-three percent of the 209 executives surveyed expect higher energy prices in the next 18 months; 78 percent, higher costs over the next three years; and 69 percent plan to spend more on energy over the next five years, according to the survey conducted by Forbes Insight on behalf of CIT Group. Eighty-percent of those surveyed said uncertainty regarding global energy policies is hurting the international economic recovery.
“As the global economy expands, the emerging economies will demand more energy and cause prices to rise,” an unidentified maritime executive told Forbes Insights.
But increased demand is only partly to blame for executives’ expectations of higher energy costs. Sixty-six percent of those surveyed said government policies have pushed energy prices higher, as efforts to curb climate change fly in the face of the need to drive economic growth in the near-term. Of those surveyed, 83 percent said “relatively high fuel prices” are helping raise consumer costs, and 81 percent said those fuel prices are easing into consumer spending.
Seventy-four percent of transportation executives surveyed say they are concerned by current and proposed emissions regulations, while nearly half say the current emissions rules are contributing to higher fuel costs. When it came to trucking executives, 86 percent said emissions regulations were raising their operating costs.
Increased emissions regulation is forcing 79 percent of respondents to spend money on new equipment, as 81 percent of the executives say they are upgrading their fleets. Nearly half of the survey transportation executives say they are working with third-partly logistics groups to optimize freight moves. About a third of executives’ companies are relocating production or warehousing to reduce fuel costs.