Fuel surcharges

[Sieg]

These surcharges are starting to get a little hard to swallow.

Keep this in mind when pricing from our vendors may appear a little high.

Here's what I'm looking at:

I'm in the process of preparing a bid for a job that is 4500 sq ft of carpet tile. Our Watkins Sheppard rate out of Dalton to Eugene is $694, their fuel surcharge rate is up to 37.5% or $260 for a total of $954 or $0.21 sq. ft. net.

A competitive GPM for this job will be around 15% or in this case $2,470 on a $16,470 bid. The freight expense with 15% margin is just about half the gross profit. It factors to about 9% increase of our quoted cost on the carpet fob the mill.

End of rant.

[Boss 5.0]

Crazy isn't it??

The company I work for uses on average 30k gallons of fuel per month. All overhead/cost of doing business. If we started with surcharges we would not have any customers anymore.

[Vegas69]

They have us right where they want us.

[69znc]

Seig

Do not know all the economics but are they screwing you or is that a resonable increase. I agree to pay this with many of my providers if I agree they are fair on other factors and thier increase is verifiable by fuel cost. This is easy to monitor and I actually encourage some who are smller to pass on a no profit to them surcharge. Small business is the essence of our economy. If you are dealing with a major supplier and you think they are screwing you change! Find a smaller one. If you want the big guys discount and that is important then you play by his rules.. Free capitalism is king if you believe.

[camcojb]

Originally Posted by Boss 5.0

Crazy isn't it??

The company I work for uses on average 30k gallons of fuel per month. All overhead/cost of doing business. If we started with surcharges we would not have any customers anymore.

same problem I have, plus my customers won't pay them anyway. I'm currently losing $2500/month+ of net profit in extra fuel costs as compared to three years ago.

[tones2SS]

It's sad because the American dollar is going down, down and down. You can see the prices rise in just about everything you buy. It takes more dollars to buy goods.
These are good times unfortunately, wait till inflation hits us.

[96z28ss]

The real f-ed up thing is that fuel prices are going down everywhere except the west coast in CA, OR, WA. Fuel should be 3.35 here in Portland instead its still $4 a gallon. They have come down the past 2 days some.

[Sieg]

Originally Posted by 69znc

Seig

Do not know all the economics but are they screwing you or is that a resonable increase. I agree to pay this with many of my providers if I agree they are fair on other factors and thier increase is verifiable by fuel cost. This is easy to monitor and I actually encourage some who are smller to pass on a no profit to them surcharge. Small business is the essence of our economy. If you are dealing with a major supplier and you think they are screwing you change! Find a smaller one. If you want the big guys discount and that is important then you play by his rules.. Free capitalism is king if you believe.

One key for our business is Dalton, Ga to Eugene, OR within a reasonable time frame........doesn't leave many options. There isn't enough leverage. Trying to determine who "they" are isn't easy. But I believe the larger trucking companies are definitely leveraging their position.........which is good business...........for them.

I have a friend with a decent sized trucking company (300+ tractors) and he's considering a Superformance Cobra so my hunch is business isn't too bad and fuel surcharges are creating additional profit ops.

600lb pallets of hard-surface flooring and 12' long 800+ lb rolls of carpet don't go UPS next day affordably.

[GregWeld]

Sounds to me like Sieg should buy a tractor trailer and start running an LTL trucking biz on the side....

[Bucketlist2012]

Originally Posted by tones2SS

It's sad because the American dollar is going down, down and down. You can see the prices rise in just about everything you buy. It takes more dollars to buy goods.
These are good times unfortunately, wait till inflation hits us.

I agree.That is what happens when you try to print your way out of an economic crisis..

And true about the coming Inflation...

Have cash reserves, stay invested, and lock in a low rate loan for your home...