Increasing gas prices affects everyone
Published 12:00 am Saturday, March 26, 2005
With gas prices continuing to rise and no end in sight, some smaller businesses and some large businesses are beginning to pass the extra costs on to customers.
If you buy gasoline on a regular basis, you know the prices just keep going up and the latest statistics from AAA of Alabama show Greenville drivers pay an average of $2.15 per gallon.
While larger companies may have suppliers bid for their gasoline and get it at a lower price, smaller companies cannot.
So they end up paying the full price at the pump.
One such business owner is Teresa Stevens, who owns Camellia City Florist, located on Commerce Street.
She said for the first time in her store’s history, she has had to place a delivery charge on orders.
The high price of fuel changed that.
&uot;Up until the gas prices began to rise so dramatically, we had never charged for delivery,&uot; she said.
&uot;But we have been forced to put a schedule of delivery fees in place to cope with the fuel prices.&uot;
She said when it takes a $100 for a tank of gas, that the cost must be absorbed or passed on to the customer.
&uot;That is now a cost we are passing on to our customers,&uot; she said.
She said they are now charging $2 for deliveries in the Greenville city limits and $3.50 for deliveries in the Greenville police jurisdiction.
Deliveries outside that area can cost even more.
Stevens said the delivery charge is being met by understanding by her customers, who are feeling the pinch at the pump themselves.
&uot;When they consider that in other cities it is costing from $7 to $15 for a delivery, what I’m charging is not that far out of reach,&uot; she said.
&uot;Of course, we’ve had a few customers who have been upset at first but when you explain to them what you have to do.&uot;
Not only is Stevens facing an increase like others at the pump; she also must pay an increase for those suppliers who ship to her.
&uot;I have seen an increase in my costs in products coming in,&uot; she said.
&uot;It hasn’t been drastic, but more subtle, but you still know the increase is there.&uot;
She said the majority of her inventory comes from two wholesalers in Montgomery and they have increased their delivery costs.
A much larger company, in fact, the largest delivery company in the world, United Parcel Service, is weathering the storm of high fuel costs.
According to Diana Hatcher, a spokeswoman for UPS, fuel makes up only 3 percent of the company’s operating costs.
&uot;That is the lowest percentage in the industry,&uot; she said Friday via telephone. &uot;We did reinstate a ground delivery surcharge in January, but it is relatively low because of the proactive measures we’ve put in place over the last few years in technology and maintenance.&uot;
She said the measures have reduced UPS’s total usage by over 30,000 quarts of oil and that equals more than $3 million annually.
&uot;We are the only company of our kind that has a completed integrated network where we use routing technology whether it is ground, land or sea delivery,&uot; Hatcher said.
&uot;The system factors in all the options in delivering a package and then chooses the most economical delivery method. In our case, technology creates fuel savings.&uot;
In addition, she said every package arrives the same.
&uot;Every package, whether domestic or international, is going to come to you in the back of a big brown truck,&uot; she said.
&uot;On that delivery, a 1.75 percent surcharge has been added.&uot;
She said UPS is the only company in the industry that has taken so many preventive measures to shield the company and their customers from higher fuel costs.
Another way they save money and pass those savings on to customers is by maintaining an excellent fleet.
&uot;We know every one of our 88,000 trucks worldwide intimately,&uot; she said.
&uot;We know every inch of the trucks and by knowing that we know when one is not performing at its optimum level on a daily basis.
This has played a significant role in managing our fuel costs at this time. We have no control over the cost of fuel, but this does give us more control on how we consume it.
The news for consumers did not improve this week as industry experts throughout the southeast said prices would likely go even higher following an explosion.
The deadly explosion left several dead and several injured at the BP refinery in Texas City, Texas. According to AAA, this refinery is one of the largest in the nation.
The high gas prices are also affecting the county government.
Since many people are trying to conserve fuel and driving less, the county is getting less money.
&uot;We get the same amount per gallon as we have for years,&uot; Commission Chairman Jesse McWilliams said.
&uot;If people start buying less gas, then we have less revenue.
On top of that we’re buying fuel at a higher price and we have less money coming in.&uot;
McWilliams said the high price of gasoline is hurting everyone.
&uot;If they deliver a load of gravel, the costs are higher,&uot; he said.
&uot;It’s affecting us all.&uot;