Sign of the Times? Not So Much
It sure was a strange sight, but a welcome one… and one that impacts almost every aspect of our lives. But is it a real harbinger of things to come, or one just designed to lull us into complacency? You decide.
You see the sign in question here, photographed late afternoon yesterday on Route 3 in Stafford, Va. Not only was the price per gallon below $2—it was substantially below, having fallen from $1.99 a week before.
But falling gas prices, I fear, raise more questions than answers. Will the cost to transport glass come down? Will “fuel surcharges” disappear, or at least abate? Will the costs related to glass manufacturing result in price decreases? Will research into more energy-efficient glass decrease? And what about the beleaguered auto glass segment of the industry: will consumers begin to drive more miles again, leading to rock chips and long cracks? Well, let’s take ‘em one at a time with a few predictions.
Will the cost to transport glass come down as a result of decreasing fuel costs? Prediction: No.
If you read the upcoming article in USGlass magazine concerning the state of the trucking industry as it related to our industry, you will see why the high demand, coupled with a lack of supply, will negate any possible abatement.
Will “fuel surcharges” come down? Prediction: No.
Let me just say, it’s much easier for a fuel surcharge to come down when it’s really a fuel surcharge and not, perhaps, a price increase in disguise, as they are often accused of being. Also, those fuel surcharges are tied to some very creative indices—ones that may not even go down.
Will the costs related to glass manufacturing result in price decreases? Prediction: No.
When you are sitting on the bottom, there is no way “down.” The glass industry may be the only legitimate building products industry that will not show a price increase no matter what, so our price changes come cloaked in other names. Take a look sometime at the graphs that chart the price changes by building materials. Glass has been a flatliner for decades. It sits on the bottom already. Besides, manufacturing is a very energy-intensive process that involves a great variety of energy sources.
Will research into more energy-efficient glass decrease? Prediction: Probably.
And that would be a real shame. I am sure you have read the theories that the decrease in pricing is the supplier’s way of lulling us into a false sense of energy security, so that we abandon or reduce our nation’s quest for energy independence. And while politicians and others might swear it won’t happen, when you are faced with competing needs and some aren’t urgent, they tend to get put on the back-burner again. We, as an industry, have to work to make sure that doesn’t happen. The money for research needs to stay there, and the incentives for zero energy buildings and other efficiency programs needs to increase.
Will consumers begin to drive more miles again? Prediction: Slightly.
…But nowhere near the record levels we saw before the recession, and not enough to help breathe life back into the auto glass industry.
What do you think about the lower gas prices? Normal market cycle or producer plot? Either way, it won’t prove too helpful to the industry.