Industry Research

Denver Operator Reduces Fuel Surcharges from 11% to 4%

Posted on March 10, 2009 by LCT Staff - Also by this author - About the author

DENVER -- Garbage haulers, cruise lines and other businesses have lowered or waived their fuel surcharges as gasoline prices have plunged more than 50 percent since July.

Many, however, didn't make changes until at least a couple of months after prices at the pump started falling in October.

Executive Transportation of Denver, which rents chauffeured vehicles, lowered its fuel surcharge in December. The company now waives it altogether except for limousine and SUV services, owner Karen Kerrick said. Those surcharges are about 4 percent, down from 11 percent last summer.

"As long as gas stays around $2 or under, we're feeling pretty darn good," she said.

The average price of regular unleaded gas in Colorado was $1.83 per gallon Monday, according to AAA. It reached a record high of $4.09 in July amid soaring crude-oil prices, spurring businesses to raise or implement fuel fees.

Waste Management, the state's largest trash hauler, has lowered its fee to $2.13 a month from a high of $4.73 last summer.

The company bases the fee on the national average price of diesel fuel as reported by the Energy Information Administration of the U.S. Department of Energy.

"If the (EIA's) national average diesel price falls, our fuel-surcharge component will come down as well," said Melissa Kolwaite, a spokeswoman for Waste Management. "Essentially, we pass that savings on to our customers."

Royal Caribbean International suspended its fee in January. Last year, the cruise-ship operator charged a fuel "supplement" of $10 a day for each of the first two people in a stateroom, up to $140 per person. Additional guests were charged $5 a day, up to $70.

United Airlines has eliminated fuel surcharges for the majority of its domestic flights, said spokeswoman Robin Urbanski. The carrier tacked on as much as $85 on a one-way fare to cover the surge in fuel prices last summer, Urbanski said.

Other companies, however, haven't lowered their delivery rates by as much as the drop in the price of gas.

LeGrue's Flowers and Gifts in Denver charges $12, down from $13 last April, for a 5-mile delivery.

"It's dropped some but not much because our suppliers and freight companies are still charging us fuel surcharges," co-owner Ron Vicksman said.

He wouldn't disclose the names of the suppliers and freight companies.

FedEx dropped its fuel surcharge for express deliveries from 28.5 percent in November to 2.5 percent this month. The company lowered the fee for its ground shipments from 8.25 percent in November to 2.75 percent.

Source: Denver Post

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