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Editor's Note: No relief in sight

Property of SeaFood Business magazine
By Fiona Robinson, Editor in Chief
February 01, 2008

You don't have to shell out more than $40 at the local gas station to hear people muttering about energy costs. Who remembers the days when gas was less than $2.50 a gallon? With upward of 80 percent of the U.S. seafood supply coming from overseas, more than a few suppliers have had serious discussions about rising production and distribution costs impacting their margins.

The first step in the supply chain where fuel hits the wallet hard is obvious - commercial fishermen. Every step further down the seafood supply chain has to grapple with the same dilemma: increase prices to stay afloat and risk losing customers. Crude oil prices have remained above $90 a barrel for long enough that relief doesn't seem imminent, and experts say we could be in for a long, expensive, energy-dependent road ahead.

An article in the Jan. 14 issue of Newsweek , "Why We Can't Stop $100 Oil," put the energy crisis in perspective. Although some Americans have adjusted their spending habits to reduce oil consumption, worldwide oil demand has not lessened at all. Global crude oil use rose 1.4 percent in 2007, according to OPEC, fueled by demand from China and the Middle East - not from the United States. Energy experts argue oil prices are beyond our control, and I tend to agree. We may be saving money driving an extra mile to get cheaper gas, but driving the extra mile puts us financially back where we started, not to mention the environmental impact of driving that extra mile.

What does this mean for the seafood industry? Don't start looking for relief. If you've been putting off upgrading your delivery fleet to more fuel-efficient trucks, or adding a supplemental heating system to lessen dependence on heating oil, don't put it off any longer. The cows could come home sometime in the next decade, but they will be hitching a ride on a hybrid.

 

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