PDA

View Full Version : Fuel $$$$ are rising - Fuel Surcharges


DVS Hardscaper
03-22-2010, 09:13 AM
In 2008 diesel fuel hit $5.00 per gallon here in our area. Five bucks per gallon for trucks that get 7-10 miles to the gallon is a little painful.

So much stuff going on in the industry - recession, competitors working for pennies on the square foot, etc.

In 2008 I absorbed the outlandish fuel costs.

But this year I'm thinking of adding another clause to our contracts, something along the lines of (the wording needs fine tuning):
"In the event the National average for diesel fuel and or gasoline reaches $3.50 or more per gallon - a fuel surcharge of $250.00 will be added to the proposed job cost...."


FOLKS -keep in mind - fuel costs go further than our trucks and skid steers. Suppliers tack on fuel surcharges as well. IT ADDS UP. Factor in your direct fuel costs (trucks, loaders, saws, tampers, etc) and factor in the fuel surcharges your suppliers will hit you with......ALL THAT ADDS UP, in an already cut-thorat market!

Anyone do fuel surcharges? Or thinking about fuel surcharges?




,

brickpuller
03-22-2010, 09:35 AM
It's almost impossible to charge on hardscaping unless you add it to delivery of the pavers. I have never had any luck adding $250 to a $25,000 job after it is signed. I would add it to your prices ahead of time and sell a little harder while explaining your costs. Most of the guys working for pennies do so becuase they have no insurance or overhead, of course you already know that. The customers that hire these people are the customers that none of use want. All they care about is price. In 2008 my fuel cost went up about $70,000 and I had a really hard time recovering. In 2009 I added $100-$300 to each estimate. If you have X amount of job, make a quess and add X amount of dollars to each job.

tthomass
03-22-2010, 01:12 PM
So you're on a project for two weeks, fuel goes up in the middle of the project and you're going to bill them another $250. I think most people would take it wrong. If I price a job at $25k, I can easily slip another $100 in there. I need to concentrate more on production than a few dollars of fuel. I forget a tool or skip something.....I just lost a lot more than fuel.

Rex Mann
03-22-2010, 02:37 PM
Does not seem practical to me. If you are at $3.50 a gallon and it goes to $4.00, then you are charging a flat fee of 250.00, which is 500 gallons. As a client I would be apprehensive about that clause.

I would build it into the price.

Peace,

Rex

PaverExperts.Com (http://paverexperts.com)

DVS Hardscaper
03-22-2010, 04:33 PM
Letz not get carried away with numbers I stated. Those numbers were intended as an example of the principle of the idea. Being this is the world wide web, do you really think I am going to post true numbers when it comes to rates?

Again - for those that did not read my award winning opening post - Keep in mind suppliers are known for tacking of fuel surcharges.

So even though you may only use a grand total of 65 gallons direct for the job - your paver supplier may be taking on a fuel surcharge, and the trucking company that brings your aggregate from the quarry may be tacking on a fuel surcharge.

What we NEED to remember is fuel costs goes further than the fuel we buy and put in our vehicles and equipment. I remember about 2 years ago on another forum a guy with a large mowing business was writing about fuel surcharges. And he made stated "what's hurting us is the surcharge that our suppliers are charging us...."

At the end of 2008 I had an internal way of recovering the fuel surcharges and higher fuel expenses, something I implemented after the costs started coming down. I'm just curious about other's thoughts and experiences.




,

tthomass
03-22-2010, 05:56 PM
Did you know you can deduct the road tax for off road use!! Shhhhh, keep it secret haha. For the heck of it, I'd be curious to see how much people are deducting for that.

DVS Hardscaper
03-22-2010, 07:18 PM
I have created a kickass spread sheet that tracks our off road gas and diesel purchases for the calander year

tthomass
03-22-2010, 08:55 PM
You should teach Excel.....Mr. Wizard

DVS Hardscaper
03-22-2010, 09:26 PM
You should teach Excel.....Mr. Wizard


I think I just may do that.



,

tthomass
03-22-2010, 11:10 PM
I'd pay but you better get a lot done quick because my attention span is shot.

stuvecorp
03-22-2010, 11:20 PM
I didn't add a 'surcharge' officially, it was more like figuring a couple extra man hours in the bid process. I am very concerned this spring because we are already at $3.00 and the season isn't started yet.

DVS Hardscaper
03-22-2010, 11:21 PM
I'd pay but you better get a lot done quick because my attention span is shot.



No problem, I have a 6 year old, so I'm sure I can handle it.......



,