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Fuel Surcharge?

Discussion in 'Business Fundamentals' started by aspenplow, Dec 31, 2005.

  1. aspenplow

    aspenplow Member
    Messages: 41

    Anyone out there adding a fuel surcharge to their invoices? I just bought this business with 17 accounts in place and he is gravely underpriced on the accounts. I don't want to to raise my prices but I have had several mentions of fuel surcharges. What is a reasonable surcharge? Anyone have clients question this? Thx and Happy New Year! Ray
  2. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,993

    Lots of people around here are doing it, Lawn care, snow removal, OIL DELIVERY:gunsfiring: (4% that's almost $.10@gallon. P%#$ me off right quick, I'm burning more wood,) welding supplies,Flower delivery:angry: , and get something shipped to you by truck if you want to see a fuel surcharge:realmad: . 4% seems to be the average

    I sent my contracts stipulating that they where based on Reg fuel being priced at or below 2.59@gallon, and there'd be a surcharge based on whatever fuel was above that at the time. The analysts where right (at least for now) so I'm not surcharging, but I'm getting surcharged like hell.

    I think if I was in your position, I'd send a letter Introducing myself as the new owner, offer them "options" to up grade their service (I see that the previously we didn't offer) and write your profits into those services. Warn your customers of the surcharge, and then prepare them for the coming price increases, then provide kick ass service to justify the increases.
  3. SkykingHD

    SkykingHD Senior Member
    Messages: 368

    fuel prices

    In our area the local trucking companies have increased the rate by 14% for fuel surcharge. I have seen where the nation average is 14% fuel charge increase. In NE Ohio the fuel is creeping up to $2.29 per gal for reg unleaded and $2.59 for diesel. The diesel trucks never saw the low prices that the gas trucks did.

    We had to raise our prices to cover the high prices of fuel. Our country runs on energy and every thing we use has energy figured in as a cost to make. All our products have gone up so we had to raise our rates also. This was a business decision we made to keep our company in the black.

    We have made up our minds years ago that we will NEVER run a company in the red. When the area management companies and low ballers destroy the market in our area we will sell off equipment and watch it snow from the inside.

  4. dssxxxx

    dssxxxx Member
    from NJ
    Messages: 63

    Truckers have been using the FS as a wasy around FCC or PUC regualtions about price increases. Most of the truckers are using Diesel.

    We have noticed with the pricing of gas reclining, that any small businesses has now cancelled the FS with the decling price of gas. JMHO
  5. SnowGuy73

    SnowGuy73 PlowSite Fanatic
    Messages: 24,870

    I was charging it, but now that diesel is under $2.50 a gallon Im not anymore.
  6. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    I'm going to have to take a different perspective. You just bought this business? I'm taking that to mean in the past few months. You should have considered all this before giving him the offer to buy. Depending on the agreement terms (betwen you and the seller plus the existing contracts between the seller and customers which you inherited), I'd say you should honor the commitments. It sounds like you just made a bad deal.
  7. T-MAN

    T-MAN PlowSite.com Addict
    Messages: 1,363

    Mick I agree 100%. A deal is a deal in my book, a hand shake or a written contract means honor your end of the deal.
    When you purchased the business you had know idea what the bids were at ??? Or are you new to the business and had no idea how to bid ? Did you get to see a profit/loss statement from the other owner ? Cooking the books is sending people to jail now.
    If the previous owner claimed profits then take it up with him, not the customer. If your making payments to the original owner maybe you should discuss this with him or her. Are the jobs under bid because of new expenses ? Or could a guy with no overhead still not make money ? I know lots of questions but they need to be answered truthfully.
    Sorry for being so harsh
  8. justme-

    justme- 2000 Club Member
    Messages: 2,138

    All I can add is that I have a surcharge for fuel until diesel drops below $2.00 a gallon and it will increase if it breaks $3.00/gal.
    It's a flat $2.00 per pass more than making up the difference.