Distributors Respond To Soaring Fuel Costs

Oct. 14, 2005
A recent informal survey conducted by Channel Marketing Group (CMG), Raleigh, N.C., revealed that leading distributors, in response to recent fuel increases, are passing on costs to their customers.

A recent informal survey conducted by Channel Marketing Group (CMG), Raleigh, N.C., revealed that leading distributors, in response to recent fuel increases, are passing on costs to their customers.

The respondents, subscribers to CMG newsletter, responded that 47 percent of them were recouping some of their increased fuel costs and another 17.6 percent responded that they would like to but either didn’t know how or were concerned about the competitive response.

The most frequent methods for reducing their expenses included: implementing a fuel surcharge on deliveries, implementing a service charge on deliveries, increasing existing service or fuel surcharges, or implementing a delivery charge on orders under a minimum dollar value.

Based upon interviews, distributors are most commonly charging fuel/service surcharges of $3 to $5 an order.

Although it was not intended to be definitive research of distributor practices, the survey did confirm the belief that distributors, faced with increasing costs and ever-present margin challenges, need to review their existing practices to improve profitability.