Fuel surcharge

[Bonibelle]

I just received the final bill from my water/well fiasco and I was surprised that the plumbing company has added a fuel recovery surcharge for each visit to my house. As I think this over, it is really making me angry! And I am sure the way that I view this charge will make some people in business angry as well but my feeling is that plumbers, electricians, contractors (and to keep this relevant, even spa service people) conduct their business at my house...that is why they are in business. They could not do business if they didn't travel to the site of business, so fuel to get there should be considered a business expense. Just because the cost of fuel has gone up drastically, I don't feel that I should be expected to absorb all of that cost. To put it in perspective, my husband drives to his job 45 miles round trip, and WE are paying for the extra fuel costs, we have no one to pass that on to. He can't tell his employer that he wants an extra $5.00 to drive to work each day)Likewise, my grocery store, Walmart, Target, Sears...merchants havent reduced the price of things because it now costs me more to go there to buy their products.

I am paying over $3000.00 for this repair to my plumbing and $20.00 in fuel recovery fees. (OK.. $20.00 isn't much, but they had to come back because they didn't fix the problem the first time). I know for a fact that the one day, they came from a job only 1/2 a mile away from me.

Am I right in thinking that fuel costs can be incorporated into the cost of doing business and don't companies that are service related deduct some of this at tax time?  

My trash company hit us with an $11.00 fuel recovery fee / 3 months ANd an administrative fee, to send a bill....Needless to say all of those blue cans have been replaced by green ones belonging to a competetor who charges one fee (and if they are adding for the rising cost of gas, it is incorported in regular fees! )

I am sure that with all the added fuel charges, these companies have way more than they need to cover the increase in fuel prices and are probably realizing a profit. If companies are going to do this, they should be required to tell the customer up front... Geeze I wonder if my oil delivery company will hit me with a fuel delivery fuel surcharge??

[spaman--]

I think its happening all over, but your repair company was up front about it and didnt hide it in the bill, so they will get it one way or another, unfortunate I know!

[Dr. Spa™ Ret.]

Sorry Bonibelle, but this is going to piss you off.

Fuel is a cost of doing business, but like EVERY OTHER "cost of doing business", YOU, the consummer IS paying for it. As costs to do business go up, the cost to the consummer, YOU, is going to go up. Do you REALLY believe the company should have to absorb additional costs to bring in the same amount of income? They're not responsible for the incresed prices, and they shouldn't be liable for it. In my opinion, they're MORE than right in passing these extra costs along, and the $20 sounds cheap :-).

Let me give you a real life example. We make covers for a few spa manufacturers. All of them get fulkl trailer loads at a time. Roughly 180 to 210 covers depending on size. I give them a delivered price (with some "outs", but I'll omit that for now). The customer furthest away from me, when we started thsi "arrangemet" 8 months ago, cost $3000 for the delivery. NOW it's costing $5500. I'm not eating the $2500 per truck load. HELL, I'm not making that much per load....so, where it the $2500 supposed to come from? A second morgage on my house? :-)

Over the last coupls of years copper prices have been SOARING. Do you know that you can sell scrap copper for $3 a pound? Man I wish I didnt throw away what I had a few years ago. Anyways, most plumbers now, when they estimate a job, call and get a current price on copper pipe prices before writing the estimate. A plumber friend of mine actually writes into the contract that the price is subject to change based upon copper prices. Would it be fair to the plumber to have to eat the costs of the price increase?

As far as your husbands commute to work. Hey, he chose the job, and where to live. I chose to live 3 miles from my office. He needs to hit the boss up for a cost of living raise.

Once again, the "cost of doing business" does NOT come out of the pocket of the company in business, but out of the pocket of the consummer buying their product. If it came out of the businesses pocket, there wouldn't be a business there for very long.

would you have been happier if they just raised their normal rate to cover the fuel costs and didn't itemize it? How would this be different? So what's your husbands job?

[Dr. Spa™ Ret.]

OMG! I typed all that?

[Dr. Spa™ Ret.]

Here, let me give you a hypothetical example, based on reality. Lets say a company is buying spa covers from us. After all the overhead for manufacturing the covers is paid for, for each cover there's $5 remaining that goes into my pocket, or perhaps is used for expansion. Regardless, this $5 is the profit on a cover. Now, lets say, that because of rising oil prices, and the fact that a spa cover is 95% oil products, the cost to manufacture a cover increases $6. Now I'm not even breaking even, I'm losing $1 for every cover I manufacture and sell. So where's this dolar come from? My kids college fund? A second morgage? Begging on the street corner?

[spaman--]

OH boy! your looong posts remind me of someone, you feeling ok? Anyway I agree with what Doc said but the cost of cut and paste went up and I am not eating it, therefor you will have to scroll up.  

[Bonibelle]

Doc, you didn't piss me off...I was already mad!  All of that is OK, I would rather have a realistic cost included in the bill, just like my example of an entire neighborhood switching trash haulers...don't show me a fuel surcharge...I am getting fueled to death already. Businesses have the advantage of just passing that cost off on the consumers. So as consumers, we are taking the blunt of all of it. In the spa world for example, we are getting hit with the higher costs of production of the product and with the higher cost of delivery..you admitted that you aren't going to take a loss.....
I am hoping that drug costs go even higher....and higher...so that my drug stocks fly up....and my husband can afford to drive to his job .    My husband works in pharmaceuticals making seriously overpriced drugs...but that is usually fair game to complain about

[Bonibelle]

I guess to put it all in perspective..When I bought my spa, I ended up buying a tub that was well over my budget. so I decided to take the 9 mos. no interest and hope that I could come up with the money playing around in the stock market
I know that sounds nuts, but that was my plan...and my target stock came through, I am paying my tub off with the profits from my Conoco Phillips OIL Stock!!  so I guess my husband is right sometimes you get the bear, sometimes the bear gives you a fuel surcharge...or something like that

[Dr. Spa™ Ret.]

WHOA! Of everything that was out there, pharmaceuticals is about as bad as it gets  

Why are the same drugs 1/2 the cost in Mexico or Canada as in the US?

As for pharmaceutical stocks, look at ELN........ you heard NOTHING for me.

Seriously, a business isn't an inanimate object. It's people. People work for the business for pay, and it's people that own the business to make a living (we're talking smaller businesses here as opposed to , say, Ford). When my costs go up, the money either comes out of MY pocket, or the consumers pocket. My income comes directly from the profits of my company. If my costs go up $1 that dollar comes directly out of my pocket.

I remember when I was a kid and looked at bill my father had made up (he's a veterinarian). there were TONS of these little charges, toxic waste disposal, syringe disposal, taxes this and taxes that. blah blah blah,  etc. I asked hi why he didn't simply lump it all together into his main fee. His response was that while most people would accept that, he felt it better to explain to people what they were paying for and where their money was going. That there were all these mandatory governmental charges and he wasn't actually getting all their money :-)

[Bonibelle]

Your Father was right, and I appreciate my vet doing the same thing. BUT I wouldn't like it if my vet charged me a fuel recovery fee because it was costing more to heat his office. That is what I mean about the cost of doing business...If your business is related to traveling to the customer to do it...then be reasonable. We figured that the fuel surcharge for the trash company in just the neighborhood next to me would be about $2200.00/3 mos. That is crazy, they couldn't be spending that much more in gas.

Isn't some of that deductable on your taxes?


Elan?...I almost ended up with Martha over a tip about  a year ago...

[Dr. Spa™ Ret.]

It's all deductable! But so what? It's still money out of my pocket.

Ok, say I sell a cover for $100. It costs me $95 dollars to manufacture the cover. $95 dollars is "tax deduteble" on the businesses taxes, $5 goes into my pocket that I pay personable income taxes on. Now, my cost goes up $6. I sell the cover for $100. I get to deduct $101 on the businesses taxes (because that's what it costs to make the cover), BUT I still have to come up with that extra dollar form somewhere to cover expenses. Where? I have to literally take it out of my own personal pocket and put it into the business to cover the loss. Now I'm not paying ANY personal income taxes, I'm giving any money I might have to support the business. This is going to make it hard to pay the rent and to eat........... much less supersize my lunch  

I take the day traders out look...... I LOVE paying taxes, cause paying taxes means I'm making money  

HOWEVER, you do have a point in that a lot of companies see a fuel surcharge as a way of charging a LOT more than the fuel is actually costing them. This I don't agree with........... necessarily.

BTW, just as an fyi, the reason this is all hitting home with me, we have a "deal" with a shipping company to ship our covers at a flat rate anywhere in the US. It's helped us pick up a lot of business dropshipping covers for other companies. As of today (this was expected and didn't come as a suprise, they told us weeks ago), they raised the "flat rate". Most everyone expected US to simply absorb the cost (no way on this planet that was going to happen   , but there's been a bit of screaming).

[Bonibelle]

Doc, as far as an increase in shipping costs, I know that is happening and will continue to happen...and I accept that. When I buy something, for example, from you, I can see my product cost and my shipping fee (and taxes, whatever). I would however be mad if ,when my purchase arrived, I had an additional fuel surcharge fee added that I didn't know about. And that is my point...you don't expect a service company whose business  occurs in your home, to hit you with a fuel cost because that is what they are supposed to do...work in your home!  
You're not going to change my mind on this one...Even if they said before they took the job, we are going to charge you for our gas to get to your house...At least I would have the option to agree or disagree to that. It's the principle, not the money. My regular plumber DOESN'T charge me for his fuel. He charges a bit more per hour, but I accept that....Unfortunately he wasn't able to handle the mess I had going on. this is how consumers develope opinions about businesses. If I were asked if I would recommend this plumber, yes, they did a good job and when you are without water, Term's friend Cooter looks good!!   But I would be sure to say they will hit you with a fuel charge, I know a plumber who doesn't.
OK, I am done with this....

[Bonibelle]

Actually I wrote a nice letter and told the plumber how happy I was with the job that they did. I pointed out that there was no way that it cost them an additonial $20.00 in gas (beyond the cost before they added a surcharge) and that if anyone asked me I would say they did a great job, but they will charge you a fuel surcharge. If others are sensitive to that, as I was, they can go to the plumber that I usually use and pay a bit more per hour. That is what I will do.
Oh I also told him to get a good feel for how people deal with fuel charges as line items on a bill, check out the trash haulers in our neighborhood....the one who charged the fuel surcharge is gone

[TN__HOT_TUB]

I hate those fuel surcharges.  Why tack on a charge just for fuel?  Why stop there?  Last I checked, ALMOST EVERYTHING COSTS MORE....that's the way things work.

If they are going to add a fuel surcharge, I too wish they'd be realistic about it.  $20 for a 0.5 mile trip is ridiculous (i'd give them a call and try to work  something out).  

Gas at >$2 a gallon is here to stay (IMHO).  Companies need to count on that and price things accordingly.

What do you think the chances are that companies will drop the fuel surcharges once gas prices go down and/or stabalize in price?   What about a refund if/when they ever drop?

[Reese]

What do you think the chances are that companies will drop the fuel surcharges once gas prices go down and/or stabalize in price?   What about a refund if/when they ever drop?

Better than if it is built into their product/service cost.  I'd be willing to bet that most companies that added a surcharge thought long and hard about it, and probably ate several months of increased costs before they implemented it.  I also think by doing it as a surcharge, they were sending a signal that they hoped that this was a temporary situation.  By having it as a line item, they expose themselves to explaining why it is still appropriate as oil prices magically drop as we near election season.  If increased fuel costs are built into in their base price instead, they will surely view the fuel savings as an offset for increased costs in other areas, and leave their price the same.