"Fuel Surcharges": We don't just pay at the pump
With record high oil prices, and gasoline almost four dollars per gallon in some urban areas, it seems anybody who can possibly tack a fuel surcharge onto an invoice does. And these usually unauthorized fuel charges are hitting consumers right in the pocket.
When costs rise, most companies face two choices. They can raise their prices or they can sacrifice profits to keep prices steady. But these days, some companies have found a third way: fuel surcharges. For some unsuspecting consumers, fuel surcharges seem like a reasonable way for companies to recoup their expenses for the high price of gasoline. But as they spread into every conceivable industry, fuel surcharges more and more seem as if they're just anotherway of raising prices, while deceiving customers into thinking they're not really paying more.
Business Week magazine recently reported on this phenomena, pointing out two distinct ways fuel surcharges are calculated: some companies calculate fuel surcharges according to fuel indexes such as the U.S. Energy Dept. index that tracks the price of diesel fuel. In these cases, a nearly 50% rise in the price of diesel over the last two years has added as much as 14% to shipping bills. The bigger problem for consumers however is when a company decides to charge flat-fee surcharges, basing the surcharge on nothing more than the opportunity to get away with additional charges. And unlike surcharges based on the U.S. Energy Dept. index, which go down when prices fall, flat fees don’t change because the link to actual fuel costs is nonexistent. In fact, flat-fee surcharges are showing up on everything from garbage collection, cab and limousine rides and airline tickets to deliveries of bottled water and coffee.
Companies impose surcharges -- instead of raising prices – because they are hoping consumers won’t notice. The America's Independent Truckers' Association, Inc. (“AITA”) has even posted a primer on its website detailing how its members can charge customers fuel surcharges. The title of its statement is: “Fuel Surcharges: Somebody is getting them, and it should be YOU!!!” The fuel surcharge, we're told, is needed to pay for the marginal increase in costs due only to the higher cost of gasoline or diesel. Apparently, if you weren't shipping the package, or ordering a service, the company wouldn't need to buy the gas. The reality of course is much different: most companies would still have to fill up their delivery trucks to service other customers. Moreover, you are already paying for the cost of fuel when you pay a delivery charge. It’s no wonder then that the U.S. Postal Service can't impose surcharges. It can hike prices only through a government-approved rate increase.
You may have noticed small fuel surcharges creeping onto your delivery invoices. For example, your garbage collection or home water delivery invoice may now have a dollar or two added, designated as an “oil surcharge.” With just a couple of deliveries a week, the extra dollar or two here and there add up fast. Fuel prices are expected to climb at least through the summer. And whether you're a consumer or in business, you'll be paying more. Possibly a lot more.
If you have been charged a fuel surcharge, please post your thoughts and reaction on our blog.
