OUR CURRENT BULK BUYING PRICE IS: 100.60 PENCE PER LITRE

(WEEK COMMENCING 28th April 2008)

We review and adjust our fuel surcharge on a weekly basis.

Major account customers have individually negotiated fuel surcharges which may be different from the illustration below.

The following table indicates the effect of fuel price increases on our operating costs.  Every 1 pence per litre difference in fuel impacts on overall costs by .5% as illustrated by the table below.

Cost - Pence Per Litre

78

79

80

81

82

84

85

86

87

88

89

90

91

Fuel Surcharge %

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

No-one can have failed to notice that every time they fill their car up, it costs more and more.  As consumers we tend to mentally offset the higher prices against the convenience of being able to transport ourselves when and where we wish.  Only every now and then, are fuel prices placed at the forefront of the public's mind when dramatic newspaper headlines or pictures of strike-bound holiday-makers focus attention on this issue.

But for anyone who distributes goods on a daily basis, fuel prices have direct cost implications on the transport movement.

Fuel represents up to 30% of Framptons' operating costs - we use over 50,000 litres per week, so an increase, for example of 10 pence per litre over a period of time, increases our costs proportionately by a massive £5000 per week!

Manufacturers frequently quote their customers fixed prices and we understand that constant increases due to fuel surcharges do erode margins.  However road transport is no longer the cheap element in the supply chain.

Not only does fuel cost more, we actually pay for diesel on 20 day terms, but receive settlement of our invoices on 30 day terms (at best), effectively acting as the Government's Tax Collectors at our own expense.

You may think that Framptons, as a company, should absorb all these increased costs.  This would certainly mean reducing the amount we spend on maintenance, insurance, and health and safety and halt any investment in training, IT resources, vehicles or other equipment. We would not be able to offer the high level of service that our customers have come to expect from us.  Within a very short period, we would find ourselves in a downward spiral from which it would be very difficult to recover.

The reality is that we have absorbed as much as we possibly can.  We have reviewed procedures, applied innovative systems and we strongly believe that we are a lean, efficient business.  We think that all hauliers who will not compromise the integrity of their service, and who intend to still be in business next year and the years to come, must impose fuel surcharges or recover their increased costs accordingly.

What we can do is ensure that our customers understand the implications for future haulage costs, so that they can budget realistic figures and additionally that they, in turn, can educate their customers about this topic. We hope that the information on fuel here helps you.