Operations

Fuel Costs Forcing Service Industry to Pass Increase on to Customers

Posted on November 14, 2007 by LCT Staff - Also by this author - About the author

YOUNGSTOWN, Ohio — EMS Plumbing and Heating of Youngstown, Ohio had been absorbing higher fuel costs, but a few weeks ago company officials decided part of the cost had to be passed on. For the first time, the company included travel time to a call in the service time that's billed to customers.

"It's gotten to the point where you have to do something," said Brenda Snitzer, EMS office manager.

Gasoline has topped $3 a gallon at area stations this week. EMS has two trucks and two vans on the road, which each drive between 30 and 100 miles a day.

"The fuel bills for the vehicles are astronomical," she said.

Because of those costs, the company has limited how far it will travel to handle warranty business for makers of faucets and other plumbing supplies, and for real estate companies. EMS used to travel as far as East Liverpool and Ashtabula for those calls but now limits its service area to Salem in the south and Warren to the north.

Gold Cross Limousine Service of Struthers is looking at increasing its fees to cover some of increased cost of gas.

"It's just a matter of when," said Grant Williams, company general manager. The company continually looks at adding a fuel surcharge but so far has decided against it. At the very least, company officials will review fuel costs when setting prices for next year, he said.

"So far, we're just taking a little bit of a hit just to keep the regular customers satisfied," he said.

Williams added that he has to be careful about rate increases because limousine service is a competitive industry and customers shop around for the best rates. Gold Cross has 12 vehicles that average about 15 mpg.

George Briel, owner of Briel's Flowers and Greenhouse in Youngstown, said he's added 50 cents to his delivery charge in the past year because of gas costs. The delivery charges, which range from $5 to $12, began three years ago.

His biggest tool in combating the high gas prices is watching his expenses. "You try to make it up elsewhere. You try to be more efficient," he said.

He now plans trips so that delivery vans aren't going to a particular area more than once a day, and he sometimes turns down small orders that come late in the day.

"Planning is more critical," he said.

SOURCE: Vindy.com — Ohio

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