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Backdoor Price Hike

Mebfab

Diamond
Joined
Jun 7, 2003
Location
Mebane North Carolina USA
Bought a new auto-darkening welding helmet yesterday. About a $160 plus tax from Machine and Welding supply in Burlington NC. They ring it up and the total has an "extra" $2+ dollars in it as a surcharge. Asked about it and the repply was or customers are charging surcharges to us so we pass it along.

I was pretty mad about this sneaky price increase and would have given the helmet back but needed for a job today.

Question is, is anyone else out there seeing this routine? Cerainly wont buy from That company again.
 
Surcharges are everywhere.You go to purchase a battery for that used lawn tractor you just bought,because it didn't have one with it when you got it,And they charge you for the old battery you didn't turn in.You buy a new set of tires to go on your truck and they give you the option of taking your old tires home but you still pay a fee to dispose of the old tires you took home.Or they will dispose of them for you but it still costs you X amount per tire.This will continue to happen until folks get tired of it and do something or it will get to the point where surcharges will take a huge chunk out of your wallet.which in reality it already does.
 
Battery and tire surcharges are very different from a welding helmet, as the surcharge is there to, in theory at least, inspire recycling. Whereas the welding helment surcharge is there because Machine and Welding of Burlington, NC is apparently run by complete idiots. They keep that up and they'll be out of business in a few years.
 
Mebfab --

I agree with you on the surcharges, which do seem to be cropping up more frequently. The usual excuse out here in California is "Transportation / Fuel Cost".

Of course, honestly calling it a surcharge is better than the "Regulatory Fee" bull that the telephone companies and other so-called public utilities have been pulling . . .

I am curious, though, did the sales clerk really say ". . .our CUSTOMERS are charging surcharges . . ."?

John
 
$2 ain't bad. The least offensive welding supplier I have here charges me an $8 hazmat fee on every invoice, and if I have it delivered they add $3 for a fuel surcharge. It's their way of recovering their increased overhead without visibly raising prices. Another one charges both, whether I pick it up or have it delivered. I have one invoice where the surcharges are more than the goods purchased. UPS charges me all kinds of surcharges for every shipment (outgoing) and I can't find out what they are until I get the bill 10 days after I make the shipment. On one overseas shipment the surcharges were over $30 on a $70 shipment. Makes it tough to know how much to charge the customer, y'know. It's annoying as heck, but I'm getting used to it I guess.
 
Slightly OT, I got charged an environmental/disposal fee from a car dealer after I replaced an A/C compresssor, then took it there to be recharged.

I didn't have time to argue but all they did was pull a vacuum and then insert 3lbs of freon.

Fuel surcharges are everywhere from bagels to steel. Taxes are ~40% of the cost of gasoline and beer. Just hoard your money and stay home is best. 8-)

-Matt
 
This was happening in the '70's when inflation was very high. Suppliers stopped printing price lists or stapled xerox copy supplements to them.

Enviromental and recycling surcharges are always in response to some law or another.

The tire and battery charges are actually a good deal. How would you like to run an auto parts store and have to put up with tons of used batteries sitting all over waiting for The Guy to come and pick them up?

Same way wth tires. It must cost a pretty penny to have to be in the tire shop business and have to pay your guys to store and handle the same amount of used tires that you sold as new ones.

A few years back in the D.C. area, guys would come by the tire shops with a long bed 1 ton stake truck.

The tire shop would pay them to haul the used tires away. The trucker would then find an empty parking lot at an industrial park in the middle of the night and drop the load.

This happened more than once in the line of warehouse bays that my old shop was in. The landlord was then stuck with having the tires yet again hauled away and doing so under county supervision.

Cost lotsa money.

In the D.C. area those tires can cross three juridictions before they are dumped.

It was and maybe still is a huge problem involving two state governments and the D.C. government, the latter being especially adept at screwing things up more than they already were.

Generally speaking we are drowning in our own trash. We have been brought up thinking in terms of the supply line that gets goods to the customer.

Now we are having to set up a duplicate supply line to get goods back from the customer when he is done with them.

Who is going to bear that cost?
 
Of course the total BS of fuel surcharges is that I suspect no one has ever *deducted* a "fuel credit" from anyone's bill when the price went below what it was prior to the surcharges being instituted.

I know in the case of UPS, soon after 9/11 fuel prices dropped dramatically and I don't recall seeing any fuel credits on my UPS bills.
 
.........I dispatch for a large non-union carrier of about 3800 OTR tractors. Freight rates are simply based on miles from dock to dock. It used to cost 96 cents a mile to break even. This was lights, fuel, maint, paying my wage, permits, registrations, etc, etc, etc.

Rates are not fixed by any means and undercutting by salesmen is rampant in the industry. Things can get so tight in some lanes that a blown $275 trailer tire will make a 2200 mile run a loss on paper. Naturally the shipper/manufacturer wants the least expensive carriage and at the same time demands a level of service.

Fuel is an expense that fluctuates greatly even in calm oil climates in various locations. The industry 'pegs' an average fuel price that a regional carrier may or may not be influenced by, but a 48 state carrier does use as a guideline.

Due to it's taxes, fuel in California is expensive, and for my company fully 30% of our total company wide tonnage comes out of and into this state. Even if you can avoid buying fuel in California or any other expensive state, you still have to pay road use taxes whether you buy fuel or not.

The logistics of going to each and every one of your customers with a brand new rate increase proposal every time fuel goes up or down just isn't feasible. Instead the customer has an amendment made to their existing contract that reflects a percentage increase-decrease in their contract based on the pegged national average fuel price.

This information is not top secret and the customer can surely watch it. UPS operates the largest private fleet of fuel burning equipment in the country. Fuel expense would naturally be a major concern.

Our current fleet usage stated as average MPG is a bit less then 6.25. When diesel goes up 50 cents a gallon on average, your 'per mile' expenses just went up about 7.5 cents per mile. Your rates to a customer can only be represented (usually) as an average of your companies increased expenses.

We haul lots of freight where the profit margin is only cents per mile. Without a fuel surcharge every load hauled would represent a net loss. The only people who can do that own the printing presses.

Since the fuel surcharge is an average, there are a few customers that will pay some fractions of a cent per mile more then if each load they shipped was broken down by fuel costs PER STATE on the route. Other customers can benefit in a similar fashion, yet both are shouldering an increase.

The trucking company is not making any more money. In fact, to try and remain competitive they may still LOOSE money that the surcharge is trying to maintain. Customers start looking when things like this happen, and good service relations go out the window with sudden price increases.

As a consequence most everything we buy has it's price increase. You've heard the term, "If you bought it, a truck brought it". It's basicly true. However this causes a cumulative increase that may get out of proportion.

A company pays for raw materials X, Y, and Z to be delivered. Each carrier is now charging an individual fuel surcharge. The company has to increase it's manufactured item's cost. This same company may also use a petroleum product as in some plastics. Their raw material price just went up and the city has raised their rates to cover increased costs in operating their trash trucks and waterpumping expenses.

The carrier delivering the finished product to a warehouse charges a fuel surcharge. The retailer may operate their own delivery trucks, but their fuel expenses have also gone up. All these compounded expenses are passed right along to the final user. Us.

I'm thankfull for a couple things. I get paid a decent wage and work in a nice environment. I also got a 2.5% pay increase this year. However my 2.5% pay increase about covers my increased fuel expense to and from work. My wife got no raise so we went backwards as far as income goes.

The other thing I'm thankfull for is that I wasn't hit for a 2.5% DECREASE in my pay.

Best,
Rick
 
Frankly Don, I don't see how anybody in that business gets by.

No they don't deduct when the price of fuel dips because that's just what the price does, dips.

Then fuel prices resume their steady climb upward.

Gas or Diesel, the kind of trucks used in the parcel delivery business use prodigeous amounts of fuel.

It's the stop and go piddling around that puts any motor vehicle at an effeciency disadvantage.

Thee isn't a place in Morgan County that UPS and FedSex doesn't go. Yet the shipping charge is the same for my outfit right here in town as it is for someone way back in them tar hills.

When the truck takes the right turn off rt. 522 and heads up over the mountain on rt. 9 West, it will use a minimum of 1 1/2 gallons of fuel to get to Great Cacapon. Then another 1 1/2 to get back to where it started from here in town.

Not to mention that the road taxes the truck and driver severely. Any delivery there accounts for 2 1/2 hours minimum.

For what? A pair of womens' slacks from Land's End?

As far back as 1977, I postulated Jimmy Kizale's second axiom. "Never get in any kind of business that requires you to have a truck."

Yeah, and that comes from someone who just loves big trucks and bulldozers and heavy equipment.

Cansidering the difficulties involved, again I have to say that I am amazed that they can stay in business at all.
 
It's the current way of doing business. There are several good explanations here, especially Buckshot's. What chaps my butt is the arbitrary and disproportionate way the welding supply shops are doing it. The Auto parts house only applies a hazmat surcharge when I buy a hazmat item, like a battery. The welding supplier charges a hazmat charge for each invoice, even if I only buy 1 pound of steel Tig rod. Buy 1 lb. 10 times, pay $80 in surcharges. Buy 10 lbs 1 time, pay $8 in surcharges. So it's really a paperwork surcharge, not a hazmat surcharge, and the small customers are paying a lot more than the big customers. I'd rather they called it what it is, not sneaking it under the guise of environmental issues. I don't even get an MSDS with the rod, so where's the hazmat cost?

[This message has been edited by Mudflap (edited 06-26-2004).]
 
I hate surcharges.
My feeling is, that if your costs have increased, raise your price or rates.
Surcharges simply allow somebody to claim they haven't raised prices or rates. Pure BS.

I have a friend that works for a large company and they refuse to pay a surcharge. I guess they can get away with it as large as they are. I don't have that choice.

The next surcharges we will see will be on the purchase of computers, monitors, televisions and appliances. They don't want them in the trash anymore and the recycling outfits claim they lose money processing the items due to the hazardous contents.

Surcharges, hazmat fees, recycling fees and any other fee are just a way for a company to pad profits while claiming they are keeping prices low as possible.
I wish they would just charge more and let their own accountants break out those costs.

Les

Les
 
Jim,

UPS has a rural delivery surcharge.I don't know if FedEx has one or not.
 
Sorry not customers ccharging it was vendors charging.

I just sent an email to Machine and Welding supply expressing my disgust.

I just spent 5 hours on site at a clients fixing a crash. Handed in a bill for 5 hours with a $5 "surcharge" on the second line. The maintanance supervisor handed it back with the surcharge crossed off. Would not try with a regular customer but I know him pretty well and wasnt actualy going to charge it anyway.
 
My Welding supplier told me that they charge a haz/mat surcharge because the government says they can. They do it to cover costs involved with providing MSDS sheets and complying with all the hazardous material laws. They don't actualy spend this money on those things, they just pocket it, because the govmnt allows them to tax consumers. It doenst matter if I am buying one welding rod or 400 pounds, I still get the same fee.
 
Fuel surcharge: My trash dumpster gets emptied on a per call basis, about 3 times per year, yet each monthly rental bill I pay a fuel surcharge for not coming to empty it. Can't beat Waste Management with a stick.Dick.
 
OK, this gets better. I am filling out the info for the $20 rebate and find Taiwan stamped on the Auto darkening filter, the most expensive part. Look through the manual and says in tiny print "assembled using parts of USA and global sources". If I wanted a foreign helmet I could go to tractor supply and save $50.

The reason I am mad is that it said Taunton Mass all over the box and nothing about "global". Also the salesman was going on about its all USA quality.
 
I work for a distributor specializing in cutting tools & abrasives. Unfortunately almost all of the manufacturers we represent have hit us with "surcharges". We explain that to our customers and ask if they want the surcharge rolled into the price or shown as a seperate line item. We really don't have much choice but pass it on.
Steel shortage and fuel costs are the 2 most common reasons.
We do advise our customers upfront when we quote prices. Nobody likes suprises like that.
 








 
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