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Soaring Gas Prices Make Life Harder and Greener For Consumers and Businesses

Subscribe March 16, 2010

It's nearly impossible to have a conversation these days without talking about rising gas prices and how they are affecting all aspects of life in the United States - from the price of a gallon of milk to the cost of commuting.

Consumers' shrinking discretionary income

As the average price of gas skyrockets above and beyond $4.00 a gallon, American consumers have less discretionary income. As a result, 53 percent of consumers surveyed said they have changed their spending habits because of rising gas prices and are questioning every purchase they make. Local businesses, from restaurants and movie theaters to clothing stores and Starbucks are all feeling the pinch in their cash registers.

Retailers across the board are suffering as consumers tighten their belts to better cope with higher grocery bills and the crisis at the gas pump. Casual restaurants such as Chile's and Red Lobster have watched their sales drop by 10% as more families head for the Dollar Value Meals at fast-food chains. Retailers such as Ann Taylor and Liz Claiborne have had to close hundreds of stores.

As one woman summed it up on the news recently, "Instead of going out to eat once a week, we're spending that money on gas."

In a country where we have grown up with a love of freedom, fast cars, SUV's and the adventure of the open road, exorbitant gas prices strike at the very heart of our sense of identity.

The Job of Getting to Work

Commuters who normally drive to work are finding alternative ways of commuting that don't deplete their paychecks. Public transportation is experiencing record increases in ridership as more people leave their cars at home and board buses and trains. Others, who continue to drive to work, are saving money by sharing the expenses with fellow car poolers. Some brave souls are even standing on the side of the road with their thumbs out, hitching a ride to work.

Trucking firms try to stay on the road

All businesses, large and small, are facing new challenges as record fuel costs endanger their ability to stay profitable. With diesel fuel costing over $5.00 a gallon, many smaller companies have been forced out of business. In the first quarter of this year, 1,000 trucking companies declared bankruptcy. The cost of diesel fuel is rising so quickly that companies can't react fast enough.

On the positive side, trucking companies are finding creative ways to stay on the road, use less gas and continue to service their customers. Some companies won't allow their trucks to go faster than 65 mph and limit idling time to five minutes. Others add a fuel surcharge and find truck stops along the way with the best diesel fuel prices.

According to Dean Xeros, Vice President of Service Delivery at Dependable Auto Shippers, "As the largest shipper of privately owned vehicles in America, DAS Auto Shippers is doing our part to control costs, save fuel and maintain superior service for our customers. We have made a commitment to drive fully loaded carriers only, which is a far more efficient practice and greener choice for our environment."

U.S. car manufacturers are feeling the pain

Gas guzzling trucks and SUVs are understandably a hard sell these days as worried consumers buy smaller, more gas-efficient automobiles. General Motors Corporation reported a 40% drop in sales of its low-gas mileage vehicles over the past year and has scheduled closings of several plants that will leave thousands without jobs. Across the board on all models, GMC has seen sales drop by 24 percent since the same time last year, while Ford Motor Company's revenues declined 20 percent. In contrast, Japanese automakers have reported brisk sales in the United States.

Airlines are struggling to stay in the air

Airlines are dealing with the crippling price of fuel in many ways, from cutting service and routes, laying off thousands of employees, retiring older, less fuel-efficient planes and, most recently, charging extra for extra baggage. Citing rising fuel costs as their reason, Continental, Delta, American, Northwest, United and US Airways now charge $25 to check a second piece of luggage. Air Trans charges a $10 fee, and passengers on Alaska Airlines and Horizon Air will begin paying $25 to check a second bag in July.

Higher fuel prices generate more "green" habits

When gas reached $4.00 a gallon, the after-shocks rippled across our economy into every household from Maine to Key West and from Seattle to San Diego. At a time when global warming is a reality and not just a theory, Americans, as always, are coming together with ingenuity and inventiveness to weather this crisis and come out of it stronger and wiser. Ironically, the pain at the pump is forcing us to take a sober look at our lifestyle choices and "think greener" which, after all, is a much better way to treat our planet.

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