Fuel surcharge???

Discussion in 'Lawn Mowing' started by shade tree landscaping, Apr 3, 2008.

  1. shade tree landscaping

    shade tree landscaping LawnSite Senior Member
    Posts: 915

    Are any of you guys chraging a fuel surcharge when gas reaches a certin price? I have in my seasonal agreement that whenever gas goes over $3.50 a gallon (gas is $2.95 a gallon today) for more than 7 days, a fee of $10 will be applied to the monthly statement. Some customers have called complaing about this but then I explain the situation that we are in with prices being this high before the summer has even begun, and that everyone from the water delivery man to taxis have started charging a fuel surcharge. Lost one customer to this today, and some customers have just signed the agreement and returned it no questions asked.

    My question is do you guys charge a similar fee? and if so, how much? Also do you guys think that mine mite be to high of a fee, or anything like that? THanks in advance!
     
  2. Toad

    Toad LawnSite Senior Member
    Posts: 443

    No, people do not need to be reminded of how high the gas prices are here. They see it evertime they go to the pump, grocery store or watch the news. Gas is $3.43 here this morning!!

    I just think you need to think hard about what to charge this year, and stick to it. No need to belly ach about it to costomers, they hear and talk about it every day. If anything you should be trying to save them money! and let them know about it. Theres a smart angle to go about this.
     
  3. ALC-GregH

    ALC-GregH LawnSite Fanatic
    from PA
    Posts: 7,053

    I think thats alittle bite to high. Do the math. If you use 2 gallons at clients home and you paid 2.50 a gallon and then the next month it goes up by .50, it only cost you 2 bucks more for the next month to cut due to the fuel increase. Add that to the increase to get there in the truck and your around what, $3 more? Charging $10 more a month is way to much. Rethink your plan some.
     
  4. LawnsRUsInc.

    LawnsRUsInc. LawnSite Senior Member
    from midwest
    Posts: 916

    I wouldnt add a fuel surcharge to your invoices just send them a letter that you have to raise your prices 1%-5% i dont know so a $40 lawn is now 42. I did a fuel surcharge 3 years ago and 1/4 of the people just didnt pay the surcharge and sent in the check without it. Yea these people are not pita's they are lawyers that could tear apart my contract if they really wanted.
     
  5. 1wezil

    1wezil LawnSite Senior Member
    from tn
    Posts: 535

    that sounds a little high i raised all my mowing only $1.50 this year and i am paying $3.16 right now, i thinks we will see $ 4.00 gas for sure. if it goes higher i may have to go up a little more we'll see.
     
  6. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    IMO, fuel surcharges make it look like you're nickel and diming the customer. Everyone knows that fuel is up, and if you didn't plan on paying $4 per gallon in your quotes this year, then you didn't plan.

    I raised my prices across the board.

    It's not just fuel that's out of control.

    It's everything in life, and if this is your only job, full time, you'd best be raising your rates more than 1-2% per year, because you're going broke.

    If you own a house, your property taxes are most likely going to go up.

    Tires for the truck / trailer are going to go up.

    Groceries are going up.

    Everything that gets shipped, which is everything, is going up.

    It might be 3-4-5-9-12 years before you realize that you're going broke, but you'll be dying a slow death none the less.
     
  7. pinto n mwr

    pinto n mwr LawnSite Senior Member
    from gr8, mn
    Posts: 422

    I was just about to post a new thread about this and something else to, probably still will. Gas sucks, ya! Going to add a fuel surcharge, no. People do hear it everyday, yeh! I will never do a fuel surcharge. I will raise my price by a percentage only based on how my percentage for the YEAR on gas has changed, not by a guesstimate on what it might cost. Know your costs before you even think of raising prices.

    My Topic for my possible new thread is...

    So, everybody is so worried about the fuel costs a going to add a fuel surcharge because of it, what about equipment costs? A decent truck these days with a plow is 36000 MSRP, I know that is not what you would pay but compare that to say 5-10 years ago. Rider, walk-behind, trimmers, etc... Maybe we should add an equipment surcharge, nope only a fuel surcharge because that's all I'm worried about. When/if you figure your cost you may find out that your equipment costs may be over what you spend in gas per year. Just my .02, wait, .03 due to rising costs though.
     
  8. LawnsRUsInc.

    LawnsRUsInc. LawnSite Senior Member
    from midwest
    Posts: 916

    pinto i liked your ending post yea why add a fuel surcharge everything is up in price why are you not ask yourselves that..... I signed up people on 3, 5 year deals years ago with a 3% increase from year to year but i have still found ways to cut costs (ordering 8 trimmers at once, putting in my order and taking delivery on all my chemicals at once) doing things like this i am able to work them on the price and they like to sell it. We are selling a service not a technology the price will always increase 10 years ago dial up was what now its $6-9 per month.
     
  9. ProStreetCamaro

    ProStreetCamaro LawnSite Platinum Member
    Posts: 4,155



    Raise your prices around here and kiss your customers good bye. Cutting prices are going DOWN in this area. We have NEVER raised anybodys price in 24 years in business. This year we MAY do a $2 to $4 fuel surcharge. If we do this we are expecting to loose a couple. This is why we may not do it. We have passed out over 2000 flyers this spring and have gotten 2 calls. The economy is to bad to even risk loosing anybody. All of our customers are in groups of 2 to 10 and we never travel more than 15 miles on any given day so the fuel prices havent hurt us TO badly.
     
  10. lawnpro724

    lawnpro724 LawnSite Silver Member
    Posts: 2,201

    Gas is running $3.29 here and expected to go even higher by June topping out around $4 gallon. I passed along a 10% across the board to all customers along with a letter explaining the need for the increase and everyone understood and stayed with me. I would only charge a fuel surcharge if your already bound by a contract with a set price, just make sure your contract is written with this in mind or that your customer understands the need to do so.
     

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