NationStates Jolt Archive

Let's take a totally hypothetical company. Now this company pays fuel surcharge of $.56 a mile for every mile you have to take their product. This isn't unreasonable given current prices. Now 5 years ago they paid essentially nothing.

Now assume they send out 20,000 loads annually (that's pretty low, one customer we have does 10,000 monthly). Figure each trip is about 500 miles. Grand total cost increase for them to do business? 5.6 million annually. The larger company loses an additional 30 million yearly. Of course this cost is going up weekly as fuel prices rise.

That's what the cost of higher fuel is for large companies, that's saying nothing for trucking companies and every other shipper in the world. Now I don't know what the average budget for transportation for these places is, but I can tell you what they used to be. About 5 years ago Perdue Farms spent $40 million on getting their product moved to the stores. Now they pay at least $70 million.

Something to ponder while at the grocery store or gas pump.

Let's take a totally hypothetical company. Now this company pays fuel surcharge of $.56 a mile for every mile you have to take their product. This isn't unreasonable given current prices. Now 5 years ago they paid essentially nothing.

Now assume they send out 20,000 loads annually (that's pretty low, one customer we have does 10,000 monthly). Figure each trip is about 500 miles. Grand total cost increase for them to do business? 5.6 million annually. The larger company loses an additional 30 million yearly. Of course this cost is going up weekly as fuel prices rise.

That's what the cost of higher fuel is for large companies, that's saying nothing for trucking companies and every other shipper in the world. Now I don't know what the average budget for transportation for these places is, but I can tell you what they used to be. About 5 years ago Perdue Farms spent $40 million on getting their product moved to the stores. Now they pay at least $70 million.

Something to ponder while at the grocery store or gas pump.

Well, being a truck driver I tend to think about it all the time...

Well, being a truck driver I tend to think about it all the time...

Most folks don't, which is sad. They wonder why the price of everything is going up and never link it to fuel.

theres the thing.

in the early days of this high fuel cost disaster it wasnt inflationary because it was sopping up everyones extra money (and profits). as it lingers on and on (driven on by an ever weakening dollar) companies have to pass on the costs or they will go out of business. prices of everything have to rise.

and when they have to pony up an extra $.56/mile, can "perdue" afford to give its workers the raise in pay they would need to cover the workers extra food and fuel costs? i dont see how.

Most folks don't, which is sad. They wonder why the price of everything is going up and never link it to fuel.

That's because people are, as a general rule, stupid.

theres the thing.

in the early days of this high fuel cost disaster it wasnt inflationary because it was sopping up everyones extra money (and profits). as it lingers on and on (driven on by an ever weakening dollar) companies have to pass on the costs or they will go out of business. prices of everything have to rise.

and when they have to pony up an extra $.56/mile, can "perdue" afford to give its workers the raise in pay they would need to cover the workers extra food and fuel costs? i dont see how.

Not far as I can tell. Budgets getting tight everywhere, only a matter of time before it snaps. They pay out more every week, so do their employees. Sooner or later things will get expensive enough people simply stop buying them. Then the companies will have to lay off. Seems inevitable at this point.

Well, I guess if private cars moved less, prices would fall...
But taking the bus is not that trendy...people are trapped in their comfort...
Green taxes should have done years ago what lobbies do now...raise the cost of fuels for private cars!
Gas is enough just for the next couple of decades anyway...
It's high time to do sth about it!:rolleyes:

If corporations are being hit with very high fuel costs, maybe they will start investing in alternate fuels. Then it will be Exxon v. Perdue, the ultimate corporate battle!

High fuel costs are pretty much the leading source of inflation right now. That, and high food prices because of the poor wheat harvest.

not as bad as the '73 OPEC crisis yet though...

Maybe this will prompt people to look for alternatives? Maybe this will urge people to buy more food that was grown locally?
On the other hand, our fuel prices have always been much higher than in the states as far as I know, and we've managed.