Fuel Surcharge

[Mungo Spike]

I have a pickup & delivery service, so the surge in gasoline prices takes a bite out of our profit margin. I already raised prices in February to compensate for higher costs for utilities and gasoline. This week I added a "fuel surcharge" to compensate for the dramatic increase in gasoline prices since February.

I notified customers that we couldn't absorb the additional operating costs any longer, and were forced to add a .50 surcharge per pickup or delivery trip, not to exceed $1 per week, as long as gas was above $2/gallon.

Nobody canceled service, nobody complained, and several responded that they completely understood.

Whether you have a delivery service or not, I would suggest that there is no better time to raise prices than when the news starts highlighting increases in prices for oil, gas, and electricity - and our customers start to see their own household costs increase.

Just one guy's opinion ... Mungo

[Fishtown]

I agree 100 %. We have a large commercial delivery route and effective August 1, we started to add a $1.00 fuel surcharge to every delivery. In my notification letter to my customers, I stated that if and when the cost of gasoline is reduced to the 2004 prices, then we will be able to eliminate this surcharge.
No complaints yet.
Andy
Fishtown Laundry, Philly

[MyLaundry]

$1.00 or $0.50 fuel surcharge seems cheap to me. I already charge $2.50 fuel surcharge per delivery. This is the way to go, as gasoline price doesn't seem to go down to 2004 level any more.

[Kitty]

As most of you already know my day job is selling and transporting of foodservice items. In a family owned company the owner had absorbed the increase in the fuel and transportation costs until August 1. We tie the costs based on transporting by costs per pound, and the September costs to the customer is .006 only the customers that have had set pricing or bid pricing are the only onew who had anything negative to say other than that it is an industry standard and anyone transporting should be adding a fuel charge. It seems customary today.

Your gas companies implemented it the first time gas went up a few years ago. Everyone else should have been with the market at minimum about 20 mos ago. when this latest increase kept rising We are very late in implementing the charge.

[Monarch]

Since you are face to face with your customers regularly, it is good to advise them of the charge, but do you have any idean how many carriers, UPS, FED EX, and Common carriers such as ABF or Yellow freight do NOT advise the customer? They just plug the new cost in and it is what it is. Your going to see the effect in grocery prices and other delivered items.

Your way is better, I just hope you are charging enough.

[Glennus]

As most of you already know my day job is selling and transporting of foodservice items. In a family owned company the owner had absorbed the increase in the fuel and transportation costs until August 1. We tie the costs based on transporting by costs per pound, and the September costs to the customer is .006 only the customers that have had set pricing or bid pricing are the only onew who had anything negative to say other than that it is an industry standard and anyone transporting should be adding a fuel charge. It seems customary today.

Your gas companies implemented it the first time gas went up a few years ago. Everyone else should have been with the market at minimum about 20 mos ago. when this latest increase kept rising We are very late in implementing the charge.

Im currently in the trucking business (reading these forums to assist my jumping into laundry!:) and there have been fuel sur/service charges in place pretty much since the week after 9/11. we truck airfreight for airlines, and the airlines themselves bounce higher FSC's off their customer the instant there is an increase. in fact, most airlines and the trucking companies that serve them have fuel service charge index sheets they send out once a month, i.e., "if fuel goes over 2.50 a gallon, we charge u 6% fsc, if it goes over 2.60, 7% etc etc. Laundry is an energy intensive business, owners should be able to recoup something in these times of higher fuel prices too.