ECN Forum
Posted By: neutron Fuel cost - 05/03/08 02:50 PM
Just curious to know how everyone is doing with the crazy cost of fuel. Are you adding a fule charge to service calls or just incorperating this into the price with out the customer knowing about it?
Posted By: sparkyinak Re: Fuel cost - 05/03/08 08:35 PM
My situation may not meet the intent of your question. Fuel costs are incorpriated in the cost of the project. All my stuff comes in by barge which is part which is a freight expense. I would not hold my breath on the prices come down within the next couple of years. It could in theory come down but just enough to say it is coming down then stabilize while the money makers pocket the rest. Fuel cost is part of your OH&P. I would personally do what I could to prevent raising rates. See what your competitiors are doing. On the other side of the coin, you can not fund other peoples projects either. If there was just a "burp" in the supply line this would be different. The problem will not go away anytime soon.
Posted By: gfretwell Re: Fuel cost - 05/04/08 01:09 AM
I think you just need to acknowledge cost just went up. This is not a hobby, it is business.
Posted By: LK Re: Fuel cost - 05/04/08 09:41 PM
Originally Posted by gfretwell
I think you just need to acknowledge cost just went up. This is not a hobby, it is business.


Problem is some fear increasing cost will loose customers, the real fact is if you don't increase you may not only loose customers, you may loose your business.
Posted By: sparkyinak Re: Fuel cost - 05/04/08 09:53 PM
You have no control over your customers. It is better to lose some of them then lose you business. Anytime you increase your rates, you have to figure that you will lose a percentage of your customers in the process. Explian it to your customers. They may or may not understand. You can never please everyone.
Posted By: u2slow Re: Fuel cost - 05/05/08 06:10 AM
Where do these customers think they are going to get a better deal? Fuel prices hit everybody.

We should be glad we can respond to our increased costs as they happen... not like employees who commute to their jobs on their own nickel.
Posted By: sparkyinak Re: Fuel cost - 05/05/08 09:08 PM
The big misconception I feel is that people think the electricians, plumblers, etc over charge anyways. By increasing you costs get them to think you are just being greedy. They do not understand the concept of what it takes to run a business or what it cost to us just to keep the lights on.
Posted By: leland Re: Fuel cost - 05/06/08 01:51 AM
Originally Posted by u2slow
Where do these customers think they are going to get a better deal? Fuel prices hit everybody.

We should be glad we can respond to our increased costs as they happen... not like employees who commute to their jobs on their own nickel.



Exactly! You will see I just updated my profile. This commute thing was a BIG factor. Fuel alon was costing me almost 7500. a year.+ the parking, 38 miles 1 way. over 8 grand savings.
The other was a good salary increase. Unheard of these days.

Back to the open road but paid for all travel.
The owner takes 5 bucks a day for fuel to get me in and out. WHAT A BARGAIN!!!! Some guys still bI**&. NOT ME!!!
I was spending about $45 aevery 2.5 days. The office is only 8 miles from where I used to work.
Posted By: Zapped Re: Fuel cost - 05/06/08 01:44 PM
Unfortunately, we'll have to increase our prices to keep up with our costs, no matter if the costs are fuel or copper wire. This is how inflation works.

I usually absorb a small increase in my costs as long as I can to see if the cost increase (in fuel, etc.) is the result of a temporary spike. If it looks like it's gonna be forever, like the price of gas looks now, I've gotta bump my rate.

So, the answer is yes. I've had to bump my rate up by a dollar an hour in the last month. This barely covers the increase, so I may have to go another 50 cents or so if things don't level out a bit.

This won't make my customers jump for joy, but unlike copper or other building material price increases, they are well aware of the increased price of fuel because they are getting hit too. What else are we supposed to do, pay to work? No, thanks!

If they come out with a 250hp smart car with a bed on it that gets 30mpg+, I'll be the first in line baby.
Posted By: gfretwell Re: Fuel cost - 05/06/08 03:36 PM
I keep trying to get the numbers to come out right for an electric vehicle. The big problem is, if you drive far enough to amortize the fixed cost, range becomes a problem. If you figure a practical range of 80 miles a day, 5 days a week for the 4 years batteries can be expected to last, it is 36 cents a mile just for the batteries.
Posted By: HotLine1 Re: Fuel cost - 05/06/08 07:30 PM
Greg:
Here in NJ we are supposed to have the 'lowest' fuel costs, based on what I keep hearing on the doom & gloom news.

I'm kicking around a Prius for my commute car (51 miles 1 way), but...I can't get past the future cost of replacment battery pack. Opinions I read are all over the place. Plus, resale value??

What kind of electrical vehicle are you interested in??


Posted By: sparkyinak Re: Fuel cost - 05/07/08 12:55 AM
An electric service rig would be one hell of a sales gimmic.
Posted By: Check Pilot Re: Fuel cost - 05/07/08 03:08 AM
One of the things I have always done was to incorporate a contingency fee to all out contracts. I explain to all our customers that because most of our work is scheduled 3 to sometimes 5 months down the calendar road, we cannot control events external to us. We add an extra 12% to our estimates for those contingencies and I've also explained that the 12% may or may not be subtracted from the estimate , depending on the circumstances at the time.

I learned my lesson when copper prices went nuts in very short order and since then the contingencies have saved our margin, - which is not razor thin, but enough to keep us in a reasonably profitable business margin and keep our journeymen around.

I lost about $20,000.00 when the copper prices suddenly went nuts and that taught me a big hurtful business lesson. Since then, I've found that the customers - once it's clearly explained - and just exactly this same way - understand and very infrequently tend to want to shop around to find a cheaper price. We have always prided ourselves on the quality of our work and our references, and I think 99% of folks understand that.

We have had to charge an extra 1% to 2% lately for the added cost of fuel for some of our customer contracts but our new, mostly homeowners, have already been briefed on the ongoing and increasing costs of getting their work done later. I'm expecting an increase in fuel costs alone to be about 6% additional in the next 6 months so we have quoted that as a worst case on top of the 10% contingency fee.

So far we are now booking into the middle of September and I wish I could get a few more guys around here in Alberta that want to do residential reno's for EC work so we didn't have to book so far ahead.

Wifey is going nuts just trying to keep everyone on schedule and handing out bonuses and raises.

There's nobody around Edmonton right now that wants (or needs?) the work? Crazy economy I guess. Sorry - end of wimpering rant.

Anyways, on a more reasonable thought, the only way to combat things like rising fuel costs and/or anything else is to carefully, might I add CAREFULLLY, and patiently, explain to our customers that we cannot control the future and we want to continue to be around in business if they need us to come back for anything later that we either did not satisfy them, or if they need new work done in the future.

Hope that helps.
Posted By: gfretwell Re: Fuel cost - 05/07/08 03:16 AM
I will make one myself if I do decide to go electric. My first thought was to do my old F150 but 28 batteries would only get me 50-60 miles at 35MPH. Less than that if you went faster.
That would also require replacing the transmission since mine is an auto.
Plan B was my Honda Prelude if the timing belt breaks. That would really make more sense. It has a 5 speed and it is fairly light and aerodynamic. I think there have been more Honda conversions so some of the ground has already been pounded in front of me. It still does not seem to make any economic sense. There are a couple jokes floating around the electric car community that basically say this is a great way to spend your lottery winnings.
Posted By: Check Pilot Re: Fuel cost - 05/07/08 03:30 AM
Greg,

We have a bit of an issue here in Alberta with energy stuff.

It was made right here about bazillion? (sp) years ago or so from some dead dinosaurs or plants or something, but we still have to pay the same price for the stuff made over in some wierdo country over on the other side of the ocean.

What's up with that?

Sparkinak has the same issue.

Somehow, we need to get a whole lot of our EXCESS resources out to the masses on the North American continent at a reasonable price.
Posted By: SteveFehr Re: Fuel cost - 05/07/08 11:24 AM
The good (well, maybe not "good") news is that colorado oil shale became economically viable around about $70-95/barrel, which means if fuel prices stay above $3/gallon, US domestic oil production could increase dramatically. It will take time to build up the technology and industry, though. People have projected it might be as cheap as $20-30/barrel. It has a poor energy return on investment, though- like every other alternate technology that results in a net energy loss (ethanol, I'm looking at you!) we'd need to build a bunch of nuclear power plants to sustain it, or else we'll just end up trading oil for coal.
Posted By: sparkyinak Re: Fuel cost - 05/07/08 03:32 PM
Soapbox time. IMO, Ethenol is in nothing more then another way for the oil industry to maintain their hold on the public. Yes, it may burn cleaner the gas at the end user's stand point, from cradle to grave, it is more detrimental then gas to us. It generates more polluants from process to consumption then gasoline. The oil companys will control it just like they with the oil now, and the due to all the mis-hype of ethenol, corn prices have skyrocketed just like everything else where it is making it much more difficult for third world countries to be able to feed their people.

The concept of ethenol got big in the 70's and 80's when the the farmers we struggling and the American's demand for oil was out of control then. Funny to think that looking back compared to today. Anyway's these big corn fields and now sub divisions and Walmarts so the supply is no longer there but the demand is. With lack of supply and the demand for fuel is bigger then ever, will be back to square one selling our souls just to put gas in the car to go to work.

Since I am on my soap box. As much I am interseted and support of electric cars, there too we have short coming looming on the horizion. Lithium-Ion batteries are the current wave of the future. The problem here currently here is the demand for litium is out pacing the supply. The prices for raw lithium has more then doubled then in the last few years. Unlike lead-acid batteries, lithium batteries and not 100% recyclable not to say they will not able to do something with the waste later so there is issues of toxic material disposal. I am no tree hugger by any means however I am for the sensible use of our resources and reducing unessasary pollution and waste. These so called "green" sources comes with access baggage that once comes around full circle will nip us in the butt.

Stepping down before I get knocked off my soap box.

Posted By: gfretwell Re: Fuel cost - 05/07/08 04:01 PM
Ethanol has always been a farm subsidy program. We are just trading ADM for Exxon.
The only long term answer is nuclear with some wind and solar in places where it makes sense. Solar is efficient when you are just using the heat in a very low tech way. Heating water is a good example. I am in a building project that required me to take down my solar pool panels. I immediately lost 6-7 degrees from an uncovered pool. Fortunately it is warm enough so I can still swim but my wife is waiting for July.
The next generation of my solars will also heat my spa and preheat water going to the domestic water heater. That is a real saving $$$.
Posted By: SteveFehr Re: Fuel cost - 05/08/08 10:44 AM
Solar is many times more efficient than ethanol. Ethanol, when you think about it, is just a really really inefficient way of putting solar energy into our gas tanks. Better to just skip the middle man.
Posted By: renosteinke Re: Fuel cost - 05/08/08 02:06 PM
Imagine I had a warehouse of Romex, yet I refused to let myself use it. I then also let it be known I would only get my Romex from members of the "Overseas Undesirable Romex Suppliers," or OURS for short. I then decided that every development would need to have the Romex a different color. I also refused to consider any other wiring method .... either proven pipe or the much anticipated - but not yet viable - "wireless electricity."

I also spent my free time ranting about "big wire" as the cause of the problems.

Just what do you think would happen to the price of Romex?
Posted By: sparkyinak Re: Fuel cost - 05/08/08 02:29 PM
"Dat dare is funny no matta who you are." -Larry the Cable Guy

It is a good thing youe senerio is fictionious otherwise we would be paying an arm and a leg for copper. Besides I could manage with one arm but with one leg, I would not get too far. As bug Buggy said, "The first step is lu lu!". I need to get some coffee in me before I go to work. This seems funny to me.

Posted By: mikethebull Re: Fuel cost - 05/09/08 10:36 PM
It's a cost of doing the job. Just like a material you have to use the truck to get the tools and other material there. The shipping companies are charging a fuel surcharge why shouldn't we?
Posted By: LK Re: Fuel cost - 05/09/08 11:36 PM
Originally Posted by mikethebull
It's a cost of doing the job. Just like a material you have to use the truck to get the tools and other material there. The shipping companies are charging a fuel surcharge why shouldn't we?



Fuel surcharges have to be approved in some states, or you may be returing a lot money, you collected plus a stiff fine. You can charge a fee but i would be carefull not to call it a fuel surcharge.
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