Fuel Surcharge

Discussion in 'Business Operations' started by crownlc, Jul 19, 2006.

  1. crownlc

    crownlc LawnSite Member
    Posts: 4

    I am curious if you are accessing a fuel surcharge, how do you compute it? How do you bill for it? and how do you communicate it to your clients.

  2. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    whats your line of work? mowing?

    i do installs...........I figure $50 gas for a small job or $100-$200 for larger ones..........again its an install and i can aim high, not to mention wear and tear but 8mpg loaded and 12 empty if i'm lucky hurts
  3. crownlc

    crownlc LawnSite Member
    Posts: 4

    Unfortunately, we do it all. Install and maintenance. Irrigation, Landscaping, Mowing, Lawn Care. FSC for a 3 day install job (whether I figure that into my bid up front or line item on the final invoice (my terms and conditions allow me to access one) would certainly be different than a $42 chem app FSC.
  4. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    here's a easy one............figure your mileage vs mpg you get for each job...........so for me if its 20 miles one way and i'm gonna make about 6 round trips for the job that is 120 miles.........at 8mpg hauling that is 15 gallons of gas at $3 gallon = $45..........so I would probably just charge a tank of gas for such a job $100 (and you always make more trips than you plan)
  5. smarino21

    smarino21 LawnSite Senior Member
    Posts: 345

    what about maintenance guys that just mow, do you say like 3% of monthly billing? Something like that
  6. procut

    procut LawnSite Bronze Member
    Posts: 1,853

    I add a $5.00 fee on the end of each invoice. Not much, but helps some.
  7. Joe65

    Joe65 LawnSite Member
    from nj
    Posts: 93

    I do 60-70 houses a week, lawn maintenance, that's usually 3-4 days, and than i do installs, retaining walls, etc, i would like to add surcharge to my monthly invoices for cuts, but I just raised everyone 3 bucks a cut this year and only one refused to pay, she said until she hit the lottery!so i would not want to hit them up again.....on my installs I pass on any gas service charge charged me from the vender,(ex:went to the usual nursery i deal with, bought $2800 of plants and they hit me with a 81 dollar gas surchare, plus regular deliverly fee)..if I can run small loads with my own dump, stone, mulch, topsoil, i just add the gas i estimate it would cost me and an extra half tank....if they question that than i can tell them we will get delivery from supplier and they can pay their gas charge and delivery will we be more than what i charge.......most of my loads have to be delivered, if the supplier charges me $150 and gas, that is passed on of course...and than add my gas charge also depending on number of trips it takes. if i have a PITA customer than I will let them know I am hitting them up 4dollars a trip to their house.....see how fast they run:
  8. Pro-Scapes

    Pro-Scapes LawnSite Platinum Member
    Posts: 4,181

    This is a great thread. At the start of 2006 we implemented a fuel surcharge. While it doesnt cover our fuel completly it offsets the rise in gas prices.

    The way I explained it to clients is this.

    Rather than just raising our rates to compensate for gas prices we have implimented a fuel surcharge. Should gas prices come back down to under 2.399 per gallon we will remove these charges. We hope this is temporary but we are all feeling the prices at the pump. We feel this is nessacary in order to bring you our competitve pricing and top quality service

    If at the time we fill up gas is at 2.40-2599 there will be a 2% fuel charge

    If gas is at 260-2799 there will be a 3.25% surcharge

    and so on and so forth. Not one person has complained
  9. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    Personally I do not advise this reason for a price raise. I am not saying don't raise your prices, I am saying just raise them and be done with it, as it has been my experience that using reasons to justify the raise can lead to further trouble.

    Specifically, I have found that using the cost of fuel as a reason later leads to some customers discontinuing service also because of the cost of fuel (i.e.: it comes right back on you). Yup, it happened to me and I've watched it happen to other Lco's as well, customers who have heard about the price of fuel as a reason for everything getting so expensive later tend to cut out some of these same expenses, also due to the cost of fuel... So I have found keeping this out of conversation is out of sight, out of mind.

    The only other thing is, I don't like to raise my prices during the season / mid-contract. The best I can recommend is see if there are ways to lower your own cost, doesn't have to be fuel it can be anything, if you can save some money anywhere, this would also help.

    Of course, implementing a fuel conservation program at this time could come in mighty handy :)

    just my .00002
  10. crownlc

    crownlc LawnSite Member
    Posts: 4

    ProScapes -

    How did you arrive at the price points/increments?

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