ICS Magazine

How best to pass along fuel prices?

June 16, 2008

(Charlotte Observer) – June 13, 2008 - Last month, Mike Bishop added a 3 percent fuel surcharge for deliveries of construction and landscape supplies. That followed months of rising fuel fees from suppliers to his Blue Max Materials in Charlotte. In March alone, those surcharges cost him $25,000.

“It's almost like people want to shoot me, and all I am is the messenger,” said Bishop, co-owner of the company. “We're at the mercy of these fuel pump prices. We just can't keep up with it.”

Soaring gas prices already are translating into higher consumer prices for virtually everything. Now fuel surcharges are an increasingly popular alternative for companies large and small, from trash haulers to housecleaners, to recoup the cost of gassing up. Some bill as a percentage of the total charge while others levy a flat fee. They risk angering or even losing customers. The alternative is losing money.

“You want to have your business survive into the future,” said Ed Jernigan, a management professor at UNCCharlotte. “Surcharges might be perceived as temporary.”

Kenny Colbert, president of The Employers Association, sees both sides.

Last week, the Charlotte human resources consulting firm began charging mileage for trips of roughly 25 miles or more to work at customers' sites. In the past, the firm, which works with about 850 companies, only charged for long hauls.

On the personal front, Colbert just received a letter saying he'd have to pay an extra $100 for an upcoming deep-sea fishing trip because of rising fuel prices.

“As a consumer, I'd rather see it is a fuel surcharge rather than just a general increase,” he said. “I can swallow it better if I understand the reason behind it.”

Business owners contacted said they hope the charges are temporary.

Customers have been understanding, said Perry and Quentin Cellucci, owner of Mecklenburg Chem-Dry. Late last year, Cellucci added an $8 charge for each carpet or upholstery cleaning job he does. The fee helps offset the cost of driving to jobs and running cleaning equipment that burns about one gallon of gas per hour.

“I feel for him,” said Cathie Weeden, a repeat customer who had her carpets cleaned Thursday. “He has to do what he has to do to make money so I don't have to find another person that I can trust to come in.”

Compulsive Cleaners, a Charlotte housecleaning service for 22 years, added a $2.50 fuel fee per visit about six months ago. Co-owner Sandi LeClair said almost none of her 150 customers complained and the money is all paid to the women who do the cleaning.

“Not many bosses would be as concerned about the gas prices going up,” said Marie Thompson, one of the cleaners. “It's awesome.”

LeClair has considered raising the fuel fee, as gas prices keep rising, but hasn't yet. Some customers already are giving her staff a few more bucks.