Big Rock Sports is pleased to announce Effective January 1, 2009 we are reducing our fuel surcharge by 25% and implementing a new, more flexible fuel surcharge program. Under this new format we will be adjusting the fuel surcharge monthly based on changes in the market price of diesel fuel.
The surcharge will be set on the first Monday of each month and stay in effect for that full month. We will be using the US national diesel fuel price as reported by the Federal Department of Energy as our index.
This method is similar to that of most major freight companies like UPS and FedEx, only better. Under the UPS program, they use the average from the prior two months. For example, in December UPS is charging a fuel surcharge based on the average cost of fuel in October. Though we cannot change UPS policies, we have developed our own program that will react more quickly to changing market conditions. The result is our customers will receive the benefit of falling prices a full month before this will be passed on to us by UPS.
Although we are excited to provide you the 25% reduction, none of the major carriers including UPS and FedEx have eliminated the fuel surcharge entirely. Information circulated on UPS and FedEx reducing the surcharge does not highlight the extremely high base rate increase (UPS = 5.9% and FedEx = 6.9%) that they use to calculate their fuel surcharge. In short, by making minor changes to their fuel surcharge and increasing their base rates faster then they are reducing the surcharge – they are playing somewhat of a shell game. At the end of the day, transportation costs will continue to increase. Even with lower fuel surcharges, our cost to ship a package to you will be on average 5-6% higher in 2009 than they are today.
Regardless of the actions by UPS and FedEx, we are proud to say that we WILL NOT pass on any of these increases on to our customers. To repeat, we have modified our program to provide you a 25% reduction in our fuel surcharge beginning January 1, 2009.
“We are excited to be able to provide this cost reduction and believe these changes show our continued loyalty to our dealers going into next year,” stated Wayne Decker, Big Rock Sports, VP Operations.
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