Growers Debate Adding Fuel Surcharge

June 11, 2004 - 09:47

The recent fluctuations in oil prices have prompted many growers to adjust their fuel surcharges to compensate for added costs. Currently, there are two bills that, if passed, would require a mandatory fuel surcharge when the price of fuel rises above $1.15 per gal. Until then, many growers have been debating how to make up for the extra expenses they have been incurring.

"I have begun as of June 7 to charge fuel surcharges to my retail customers," said Sandi Hillermann McDonald of Hillermann Nursery and Florist, Washington, Mo. "In my floral delivery area, I am adding $0.50 per stop. On my bulk nursery deliveries, I am adding an additional $2 per stop for surcharges. My equipment repair is adding an additional $2 per stop of equipment deliveries and pick-ups."

"We have both tree and shrub delivery plus florist delivery of flowers. We have raised delivery charges as the gas prices go up," said Bob Schmitz of Wileywood Nursery, Mill Creek, Wash.

Mike Schaefer of Schaefer Greenhouses, Aurora, Ill., had another idea. "We had to bump up prices to cover general costs. We had talked about adding fuel surcharges, but we decided to put a 3 percent price increase on our products. We might still consider it, but we thought the best thing would be just to raise the product price. When the summertime business dies down, you would never make up what you need to get with a fuel surcharge."

Charles Schroeder of Schroeder's Flowers, Green Bay, Wis., has increased delivery prices to compensate for the increased fuel costs. "Depending on the situation, we have increased the amount we are charging people for delivery," he said. "We have been charging for delivery for some time now, but we did increase this year when we saw what was happening."

William Bettinger of Bettinger's Greenhouses, Toledo, Ohio, felt it was too late in the game to change prices. "We constantly monitor our costs and expenses, but a lot of pricing has to be done months in advance."

Many growers are optimistic about the response they have been getting after they raised fuel surcharges or prices. "There is no other way," said Schmitz. "I think people will accept it because their gas prices are also escalating."

"So far, my customers seem to understand," said Hillermann McDonald. "The feedback I have received was tremendously in favor of such a venture. My staff came on board when I showed them that I pay at least $5,000 a month for gasoline."

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