Einstein showed that time is relative to the speed at which one travels. Magazine publishing has its own version of relativity, and we were a little behind the space-time curve with this story.
Several months ago as the price of oil was zooming toward $150 a barrel, sticker shock at the gas pump seemed the number one topic of conversation just about everywhere. So I asked our research staff to conduct an online survey of readers to see how they were coping with skyrocketing fuel prices.
During the period when the survey got underway, surging energy costs were overtaken by the global financial meltdown and stock market plunge as top-of-mind concerns. In fact, the recessionary repercussions have served to drive oil prices down to almost half of what they were at a peak just a few months ago. A barrel of oil still sells at a level that would have caused everyone to gulp a year or two ago, but after the run-up of early 2008, our perspective has been skewed into thinking we’re in the bargain basement. There’s that relativity thing again!
Nonetheless, the charts with this story reveal some interesting insights about steps being taken by industry citizens to insulate their businesses when energy costs were surging.
There were 299 survey respondents in all, three-quarters of whom identified themselves as distributors, with manufacturers and contractors representing most of the rest.
Our survey contained three key questions. In examining the impact of rising fuel prices, about one out of eight (12%) cited a “severe negative impact,” with almost three-quarters of respondents saying energy costs had a “moderate negative impact.”
Asked what steps they have taken in response to fuel price increases, the most prevalent item checked was “reduced business travel,” with almost half of respondents saying they’ve done that. Almost a third said they had moderated temperatures inside offices to reduce heating/cooling costs, with another 16.8% saying they had done so inside warehouses or manufacturing facilities. These are all simple actions to take that can be done immediately, which no doubt is why they are popular short-term solutions.
Alas, the third most prevalent response was 23.6% who checked, “We have done nothing.”
Among the “other” responses, many distributors wrote in that they have added a delivery/fuel surcharge. Other innovations included:
- Asked for voluntary reduction of vehicle use.
- Buying power from a broker for extended periods.
- Coordinate deliveries closer.
- Cut delivery area.
- Deliver only two days a week.
- GPS in vehicles, limit amount of fuel on gas cards.
- Reengineered cooling and roofing.
Some of the other aided responses to this question included “switched to more fuel-efficient company vehicles” (15.2%), “alter employee schedules” (6.8%), “offer employees the option to work at home” (3.0%), “organize employee car pools or other ride-sharing programs” (4.7%). These are all longer-term solutions that take time to enact. This brings into perspective the next question on our survey, which asked, “Which of the following steps would you seriously consider in the near future to help cope with fuel price increases?”
Compare the results side by side:
“Switch to more fuel-efficient company vehicles”:
“Altered employee schedules to enable a four 10-hour day work week, or some other schedule that reduces employee travel”:
“Offer employees the option to work from home full- or part-time”:
“Organize employee car pools or other ride-sharing programs”:
“Subsidize employee transportation”:
These responses indicate distributors and manufacturers understand the need to take concrete actions to deal with rising energy prices. We can’t tell to what degree business leaders may have returned to their blasé ways now that fuel prices have dropped from the stratosphere to the upper reaches of the atmosphere. Suffice to say that the price relief being experienced now as a result of slumping demand is all but certain to be temporary. You can put a silver lining into the recession cloud by using this time to enact policies that will pay off when business conditions pick up again.