Talk about having gas pains-the skyrocketing cost of fuel over the last several months has begun to put a stranglehold on the nation.
American motorists have been crying for relief for weeks as the price of gas has continued to soar, finally topping $2 per gallon across most of the country. And this on the verge of Memorial Day weekend, the kickoff to the summer vacation/driving season.
But they're not the only ones hurting. Businesses that service the motoring public-including trucking fleets that ship goods, commercial tire dealerships that service those fleets and wholesalers distributing tires, not to mention tire manufacturers-are scrambling to figure out a way to guard diminishing margins while gas and diesel prices rise.
``Black gold'' indeed.
Blame the situation on increased demand, a scaling back of production on the part of OPEC, refinery problems, uncertainty in the Middle East fueled by continued threats of terrorism and the war in Iraq. Whatever the cause, the fact remains, businesses that budgeted operational costs based on somewhat of a fixed average for fuel are now shooting at a moving target.
As the well figuratively goes dry, dealers running service trucks and wholesalers with delivery trucks face an uncertain foe in the guise of their local gas pump.
They're playing a variation of Russian roulette, wondering whether to hold tight and hope prices will fall or raise prices to customers to cover their growing fuel outlay and, if so, by how much. They worry that bumping up charges risks alienating some customers who themselves may be feeling the pinch.
A ``rapid fax'' poll and a number of interviews by TB with commercial dealers and wholesalers across the country revealed that most have seen their fuel costs increase by as much as 25 percent over last year. Although some are holding the line on passing along increases to customers, most acknowledged they probably had little choice but to do that, since fuel concerns have been squeezing already-thin margins.
Some of those interviewed said they were tacking on fuel surcharges, increasing service and delivery charges, cutting back on deliveries and considering raising tire prices. One dealership, though, lamented it could not hike those, ``since manufacturers' costs are going up 3 to 5 percent'' in the next few weeks due to escalating raw materials and labor costs.
Our editorial in the May 10 Tire Business said it's time for the tire industry to demand a fair value for its products and services. More than ever, this is one of those times. That tack is even more crucial in light of the escalating fuel crisis facing dealers, their manufacturers and suppliers.
We urge dealers to take a long, hard look at measures they can institute to recoup losses created by higher diesel and gas prices...just don't look too long.
We're not suggesting gouging customers. Just charge enough-a fair amount-for your products and services to cover increased costs. It's the fair, right way to ease this royal pain in the gas.