A Gallon and a Barrel - What causes the difference in Gas

Why aren't gas prices falling as fast as oil?

Posted by Chronicle News Service July 24, 2008 07:12AM

GRAND RAPIDS -- As an employee of the local courier business her husband started 15 years ago, Bessie Miller relies on transportation, but she feels crippled by high gas prices.

At Jd's Courier Service, a delivery vehicle's tank sometimes is filled two or three times a day. Fifteen years ago, Miller and her husband spent 30 percent of their income on fuel. Now, it's more like 50 percent.

"It's a tough business, but you have to try to keep your head above water for sure if you're driving anywhere these days," she said.

She is one of many who are raising the question: If crude oil prices are dropping, why aren't gas prices falling, too?

Oil prices fell nearly $4 per barrel Wednesday, continuing a downward slide and tumbling below $125 a barrel for the first time since early June. Crude for September delivery dropped $3.98 to settle at $124.44 a barrel on the New York Mercantile Exchange. The August contract expired Tuesday at $127.95.

Press Photo/Jon M. BrouwerHector Torres pumps gas Wednesday into his car at the Marathon Station on 44th Street SW as his girlfriend's son, Oscar Villeges, age 8, waits.

A report by federal energy officials offered further evidence that cash-strapped Americans are cutting back on fuel. Demand for gasoline over the four weeks ending July 18 was 2.4 percent lower than a year earlier.

Retail gas prices fluctuate because of the price of crude oil and the supply available related to the demand. Retailers who have yet to change their gas prices to reflect crude oil's drop may be trying to recoup some costs, said Linda Casey, spokeswoman for Marathon Petroleum Co., which owns Speedway SuperAmerica.

"Crude oil went up so fast in the last month that we saw increases several times a day in the price," she said. "Gasoline prices did not keep pace. Gas prices were raised an average of once a week."

"When the price dropped off of crude oil, they didn't drop gas prices so quickly because they were trying to recover the losses that occurred on the way up."

Mark Griffin, president of the Michigan Petroleum Association, said it's not unusual to see a retailer break even or lose money on gas.

The total cost to a gas station owner for a gallon of gasoline bought and sold Wednesday, on average, was $3.91, Griffin said.

That is at the current price for crude oil, and includes the gas, taxes the owner pays up front, and shipping and handling from the refiner, Griffin said.

Retailers who are selling gas for more than that may have bought the gas earlier than Wednesday, when the price of crude oil was higher. They also may have bigger overhead costs than the average retailer, he said.

Retailers do not profit much on gas, he said.

"We would much rather see gas prices go down than go up," he said. "It's good for our customer. If he has more money in his pocket, he's more likely to come in and spend money on the convenience store items they consistently make money on -- the candy and the cigarettes."

Ethanol futures Wednesday were down 9 cents.

"It looks like the (corn) crop is going to be better than they thought originally with the rain in the Midwest," Casey said.

Miller has her own theory.

"I think there are way too many people who are in politics that have their money in the oil, and too many people trying to make money," she said.

"I think they ought to just take the gas tax right off in Michigan because the economy is so bad," she said. "People can't afford the gas. People are choosing between putting gas in their car and feeding their children."

"You have a gas tax to fix the roads. What good are the roads when people can't afford to drive on them?"

At the gas pump, prices have declined, but not as fast as consumers would like. A gallon of regular dropped more than a penny to an average of $4.04 nationwide, according to auto club AAA, the Oil Price Information Service and Wright Express. In Grand Rapids, prices ranged from $3.93 to $4.14 a gallon, according to grandrapidsgasprices.com.

"I think it's all crooked," said Kentwood resident Cathy Booth, who put $47 worth of gas into her tank at the Marathon station, 1530 44th St. SW in Wyoming. "Somebody's making a lot of money on us. There's something not right about this whole thing."

A strengthening dollar further pressured oil prices. The dollar's decline has been a major factor in oil's rapid ascent over the past year, as investors bought dollar-denominated crude contracts as a hedge against inflation and a weakening U.S. currency. But when the dollar strengthens, that currency-related buying can unwind.

"Something's gotta change. That's all there is to it," said 89-year-old Grand Rapids resident Ruth Stonehouse. "Especially us seniors on fixed incomes. It sure takes a bite out of the income."

-- The Associated Press contributed to this story.

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Success and Good Health to All,
Jim

For more information on How to Start and Operate a Courier Service, visit me at www.deliverybizinc.com Blog http://jims-ideas.blogspot.com

Trix and Tips for Your Courier Business on Time Management

How is it that one Independent Courier Driver can make from $800-$1000 a week while another Courier doing almost the same thing just barely gets by? What makes the difference?

One Important difference is Time-Management. One of the reasons that many Independent Couriers are struggling is because it seems there are never enough hours in the day. Since this is true for everyone, the ones that waste time are the ones that "Lose".

You see your time is the only real modern currency you have today to trade. You can’t save time and use it later. So how you use your time is one of the main factors that will determine your success. Controlling your time properly, not accepting deadlines that are too tight to complete, accepting too many jobs and feeling like you started your day 2 hours late, all contribute to Stress that reflects on your work and your professionalism.

Let's take a look at what you should do when you first start your Courier Business and show you why time management is so important:

1. You have to survey your area to scout and identify solid potential customers. This includes customers from 2 segments of the Industry. 1. Private Companies 2. Other Courier Companies.

2. You then have to present yourself and your business in a professional manner to these companies to build credibility and establish trust. This could be in the form of having a good looking uniform shirt with company logo, a name badge with your photo and the right business cards and price lists.

Large courier companies like Fedx, UPS etc. all have their staff wear company close to establish branding and professionalism in the minds of customers. You should do the same.

3. Now that you have researched and surveyed your target customer base, created a professional image and established some sort of brand in the minds of the customer, you need to make contact with those customers. This is where you’ll start making phone calls, send out direct mail pieces, place classified ads and advertise on Google’s search engine.

4. You must know what your USP is. USP stands for "Unique Selling Point". If you don't know what your UPS is then put your thinking cap on now and develop one that sets you apart and one that you will feel comfortable with. Remember, you are not the only Courier that will be contacting these companies, why should they use you. You have to tell them Why!

5. Once you’ve begun working with several customers it only make good business sense to keep in touch with those customers. By phone is good but can't be done too often, In-person is good but may require appoints-drop ins work and should be used as well, direct mail has some supporters but unless its a followup on a job that you have done or to announce a new service-I believe it has low impact, email probably has the best result because it can be done easily-designed to look like your web site (You do have a Web site don't you?) and can be done almost weekly.

If you don't have a presence on the web yet, check out Microsoft Office Live Small Business. It's free, your company web site is free, email is free, even email marketing campaigns are free, So how can you loose. Click on this link and take a look http://smallbusiness.officelive.com/GetOnline/

As you can see just from the small list of activities I have mentioned, there’s a lot to do, and wasting time surfing the net or talking to friends on the phone will severely detract from the time you need to grow and market your business.

So how can you be more productive and manage your time more effectively?

The first thing you need to do is to list all the activities that are directly responsible for bringing in the work. You can start by making a detailed list of the activities you need to do as mentioned earlier in the article.

You need to focus your time on these activities above all things so prioritize your list in that order of importance.

The next action you need to take is to break that list of activities into segments and focus your attention on one part of that particular activity. For example, if you need to make a list of top customers in the private companies segment, don’t mix up that list with courier companies, concentrate on the private company list only.

Do one thing thoroughly. As long as it’s an activity that directly contributes to your business growth, you will immediately become more productive while growing your business rapidly.

Next you need to assign deadlines for completion of these activities as well as having a check list with mile posts along your trip to check up on yourself as you make progress. Check off the things you have completed and immediately move to the next activity on your list.

Becoming a Top Courier Business takes Focus. Keep your goals and to do list in front of you at all times and "Stay on Target!"


Success and Good Health to All,
Jim

For more information on How to Start and Operate a Courier Service, visit me at www.deliverybizinc.com Blog http://jims-ideas.blogspot.com

Save Gas- Make More Money with Your Delivery Service

Tough Times are Here Now
For Your Delivery Service

I talk with Couriers from all over the country every week and what do you think their largest concern is?

Fuel Costs!

If something isn't done soon about this aspect of our Industry then we will have to re-invent the wheel. Well, I think that process has already begun. I have found one of the most EXCITING Developments in our Industry since the invention of the hand truck. A way for you to convert your Van, Pick-up, car or any other vehicle into a Half Water-Half Gas fuel burning Money Saver!!!!!

If you could pay 50% less on your fuel costs, what would that do to your bottom line?
If you think that sounds Way to Good to be True but still want to find out more right now. Click on the link Below and get all the details.

Half Water-Half Gas

Here is a Note from the Inventor:

If you ever wished to beat insane fuel prices and stop wasting money at the pump then I can show you how in the next 5 minutes - but only if you have an open mind and willingness to listen.

In fact, I will show you how to spend up to 60% less on gas while at the same time clean up your engines deadly CO2 emissions and reduce engine temperature (and prevent global warming). As an added benefit you might also get a small boost in torque (especially uphill).

Fortune 500 Petroleum Companies
Are PRAYING You Will Never Find This Out

Nexus Magazine published in their Oct-Nov 2006 edition an article called "A Water-Fueled Car" by Carl Cella. It was their first and last article on the topic. In fact, every year somebody comes out to talk about using water as fuel BUT they are all silenced by the big oil companies (sometimes with cash, usually with threats)

Do you think trillion dollar oil companies want you to find out the truth? Of course not. It would cost them billions. That's why they programmed society through advertising and media so that anytime somebody mentions using water as fuel your mind is immediately thinking "that's impossible" or "it doesn't work".

Insane Gas Prices -- They're ripping you off!!

If you want to put more money in your pocket and say "Up-Yours" to the Big Oil Companies, Click on the link below while this historic idea is still available

Half Water-Half Gas

Success and Good Health to All,
Jim

For more information on How to Start and Operate a Courier Service, visit me at www.deliverybizinc.com Blog http://jims-ideas.blogspot.com

P.S. I am installing one of these this weekend. I think that every courier, especially Independent Contractors, should do it NOW. You're only talking a few hundred dollars in parts and a weekend to save $Thousands, why not get started. Good Luck.

Resources for the Courier Service Business

As you develop your Same Day, Scheduled, Time-sensitive, or Logistics type of Delivery Service, knowing where to find answers becomes very important.

The Resources that are critical to you can easily be found on the Internet if you know where to look.

For example:
What if I have a business question, where can I go to get that answer?
What if I'm not sure about an IRS form or have a question as to the folks that work with me?
Where can I see what the National Average is for fuel costs?
What about Associations that might help me grow?
What are the Federal Regulations for my business?

Below, I have listed a few of those resources for you to file away and have available when the need arises.

Courier Links
www.AEMCA.org - Air and Expedited Motor Carriers Association (AEMCA)
www.ExpressAssociation.org - Express Delivery & Logistics Association (XLA)
www.airforwarders.org - Airforwarders Association
www.couriertimes.com - The Courier Times
www.expresscarriers.com - Express Carriers Association (ECA)
www.MCAA.com - Messenger Courier Association of the Americas
www.aaa.com - AAA - Daily Fuel Gauge Report

Business Resources
www.GPOAccess.gov - This is a site for all federal regulations
www.score.org - This is a site that offers answers to small business questions
www.businessforum.com - This offers lots of articles on business topics
www.irs.gov/businesses/small/index.html - This is the IRS site but for small
businesses
FlightStats.com – FlightStats releases monthly analysis of on-time arrivals and
delay characteristics for the top 40 US air carriers

Always remember that Networking with other Courier Business owners and asking for their help anytime you need it is good for everyone involved. I find that the folks who run other companies are very wiling to help if you do not represent a threat to them and there marketing area. Therefore, often times, you may need to Network with Owners and Managers in other states or other regions of the country. The "Courier Magazine" has a Resource Book available that list virtually all the better Courier Service Businesses in the Country, so give them a try if you need contacts.

Success and Good Health to All,
Jim

For more information on How to Start and Operate a Courier Service, visit me at www.deliverybizinc.com Blog http://jims-ideas.blogspot.com

Developing a Price List for Your Courier Service Business - "You Lose" part 4

Developing a Price List for your Courier Business is more than critical, it should be ready before your business cards. So, when you are 1st getting into the market as a new business, what's the plan? How much can I charge and still get the business? Is it enough to make a profit and can I grow the business on that profit margin or just survive? Let's take a look at some ideas.

Know your Market. You first need to take a look at the competition. What are their base prices for local deliveries and what do they charge per mile for a delivery? Do they have different pricing for Small Vehicles and Vans? (Trucks are a different pricing structure entirely) Do they charge for Attempts? Do they charge for Wait Time? Do they charge for weight and number of packages? What about additional stops on the same run? Are they including fuel surcharges, after hours surcharges, etc. to their bills and do they add a late fee to their past due invoices? Do some good detective work and get a copy of their price sheets if at all possible.

Base price: This is the price you charge for a delivery usually within a 25 mile radius of your base location. You may go 1 mile or the full 25 miles but the charge is the same. Many companies simply use the base charge as their home base City and use a flat rate for the entire City (depending on the size, of course.) This is an important price, however, because often times more than 50% of your business will be done here. If you under price or over-price this "You Lose".

Charge per Mile: This one has some bumps in it. Your per mile charge must be competitive and reflect the market you are working in. Some areas get more per mile and some less. It depends on where you live. At the date of this writing, I see per mile charges of from $1.35-$2.25 per mile in various areas. What you have to decide is what price your customer can live with, while allowing you to make a living, keep up the maintenance and pay for the gas. If you pick the wrong number "You Lose".

Surcharges: There are many different types of surcharges. The most common are Fuel surcharges, After Hours surcharges, Additional Man, Equipment, Airport, Holiday, and more.

The Fuel surcharge is one of the more important ones in today's environment. It is there in order to allow your per mile rate to remain stable while being able to adjust for the rising cost of fuel. At this time the average fuel surcharge is 15%-22%, depending on your market. That is the percentage you add to the base total of each delivery.

Next is the After Hours surcharge. It is common for a company to increase their charges by a percentage or a flat additional fee after regular business hours as in after 6PM thru 6AM.
How about Holiday surcharges? The best way to determine what holidays is to use the schedule of the largest Courier Company in the World FedX. If they are not running, then you charge a Holiday surcharge. Get a schedule from FedX and list those Holiday dates on your price list/sheet. The amount is generally a flat rate often $25 or more.

Airport surcharges: As a time-critical courier, often times you will be going to the airport to pickup or deliver. The airport can be a bottomless pot hole that drivers get lost in. The plane is delayed, the lines are long, the agent isn't there, the forms need to filled out properly, all of which takes extra time and effort. Therefore, you add a flat additional fee to your base price, every time you go the the airport. Often that will be $5-$25 depending on your situation.

Past Due Fees: Many companies feel that if they charge a late fee for payments, they will lose their customer. I can't deny that this may happen, but better they leave you owing $100 than $5,000. It has happened to me with some of the best, so do what all their other vendors do, charge them if they are late, whether that is 30, 45 or 60 days, you have decide what your terms will be.

Attempts: On occasion, you will arrive to pickup a package and it won't be ready or you will go to deliver a package and no you will be able to sign for it and receive it. That is an attempt. It takes you as long to do that as it does to actually finish the job, so you charge a fee for your time and effort. Most companies charge from 50% to 100% of the original price for an attempt. Do not do your customers any favors here unless you feel you must. Your time must equate to $$$$ too.

Additional Man/Equipment surcharges: For some deliveries, you may need some special equipment, such as furniture blankets, special hand trucks, straps or lifts. These all come at a price to you and you must pass that on to your customer. The amounts to charge here vary far to much for me to add any advise but cover your cost and add a percentage of profit to it. Also, on some occasions, you may need to send an extra man to help with a load. When you do, develop a reasonable hourly rate and start the clock from the time he gets in the vehicle until the job is done and he returns.

Weight and Number of Packages: When you charge flat rates, you must assume that there is a weight limit on that rate before you add to the charge. Also, the same applies to the number of packages. So in your price list/sheet, tell the customer what that limit is. For example, this price good for the 1st 200 lbs. Over that $00.?? per pound additional. Or the same with the number of packages. this price good for the 1st 3 packages, after that $??.?? per package additional.

Additional Stops: When you pickup several packages at the same location to deliver for the same customer, they usually expect a break in the price. Now this applies only if it is within the same city or 25 mile radius area, for example. It's common to charge 50% for the additional deliveries. If those deliveries are in other areas, then it is at full rate.

Wait Time: Deliveries don't always go like clockwork. Their are times that a package isn't ready when you arrive, their are times you must wait for someone to sign or can't find the person to sign. That's when Wait Time kicks in. Usually, you allow the customer 15 minutes per location to affect the pickup or delivery. After that you charge per minute Wait Time. That fee is usually from $30-$40 per hour broken down into minutes.

Van Pricing: All I will say at this point is that all of the above, although meant to address small vehicles such as cars and small trucks, also applies to Vans. Except, the base charge, mileage charges and several other surcharges need to be adjusted due to the increased cost of operation.

Keep your Price List updated at all times. Make it look neat and professional. Have it ready to hand out OFTEN! Make sure it is easy to read and gives the customers what he needs to pick you as his Courier Service.

All of these surcharges must be listed on your price list/sheet and the customer must be fully aware of the charges. NO SURPRISES or "You Lose".

Success and Good Health to All,
Jim

For more information on How to Start and Operate a Courier Service, visit me at www.deliverybizinc.com Blog http://jims-ideas.blogspot.com

What is a Courier Service

A Courier Service has many faces, and provides services to almost ever person and every business in this Country. As you think about starting a Courier Service, you need to concentrate on a niche that you either know something about or would like to a part. For example:
1. Same day Air Freight;
This area requires probably the deepest pockets and the most complicated regulation requirements of most of the other segments of the Courier Business. Since 9-11, Homeland Security has taken record keeping and reporting to a totally different level. Most companies have 1 or more people on their staff that deal only with the regulations. Also the cost and credit requirements of the Airlines, makes getting an account with them very difficult. "Deep Pocket Companies" only. To be a part of this part of the business, the best way is to become a local agent for a National Company.
2. Local or Regional Same Day or On-Demand Ground Deliveries;
This is the road most start-up companies take due to it's low cost of initial operation. You truly simply need a good vehicle, a phone and some business cards to start here, but you must know what customers you are going to target. Think about manufacturing (parts, electronics), business offices (documents, office supplies) even Retail Stores (inventory, customer deliveries) .
3.Routed Deliveries;
Many companies have a need for a team of drivers to make routed deliveries everyday. Some prefer to out-source this to a Courier Company and let them staff and schedule those deliveries for them. Some of the companies which do this are auto parts, pharmaceuticals and companies with multi-sites in your market.

We don't really think much about it but Federal Express, UPS and even the US Postal Service are Courier companies and of course cover the world.

Early on, I suggest you pick a segment and concentrate on it. It is not advisable to have, for example, a Same Day and Routed delivery area within your company at the same time. These segments require totally different skill sets and will keep you from focusing on what will help you grow your business. Always remember, "More Business is not Always Good Business". Be Careful!!!

I came across this article on What Is A Courier Service recently and thought it might be of interest. Click on the link and give it a read. http://www.wisegeek.com/what-is-a-courier-service.htm

Success and Good Health to All,
Jim

For more information on How to Start and Operate a Courier Service, visit me at www.deliverybizinc.com Blog http://jims-ideas.blogspot.com

Attracting and Keeping a Courier Service Customer - "You Lose" part 3

Starting a Courier Service requires a vehicle, a phone, business cards and, Oh Yea-Customers. So what about that customer? What does he want, what does he expect and are you sharp enough to keep him once he uses your service? Mainly it's keeping the customer that counts most. If you slip-up here "You Lose".

First of all a customer obviously wants deliveries made for his company. Those items could be documents between branches or to the post Office, maybe pharmaceuticals to drug stores or nursing homes, maybe aircraft parts to other repair facilities or to the airport for a next flight out. Folks that are not in the business have no idea how many things move around their community everyday in the hands of a Courier. Products to deliver could cover a book so let's move to the real point, customers want you to be on-time, in a clean-proper vehicle and deliver on-time as well as notify them when you are done. If you can't deliver on-time "You Lose".

The customer's expectations are very demanding but fair. For time critical deliveries, you should always pick-up within one hour of their original call to your company. The person who takes the delivery order should get full details on the delivery. Does the customer have an account with you? If not, it is often best to ask for cash on the 1st delivery and then set them up as a billing customer. What is the item. Do not handle hazardous goods early in your business. What is the size of the item . If you don't know this, you may send the wrong size vehicle to handle it and that really ticks off a customer. What is the delivery deadline they expect, So many times I have asked this question and they want it delivered well before we could even pick it up. When this happens, tell them when it can be delivered and then ask if they still want you to do the job. NEVER ACCEPT A JOB YOU CAN NOT DELIVER ON THEIR DEADLINE. EVER!! If you do "You Lose"

Can you keep the customer? There is a saying,"it is easier to get a Customer, than to Keep one." Believe it. Your customer gets contacted by your competitors constantly. Don't give them a reason to make a change. Which goes with another old saying, "You're only as good as your last football game". It does not matter if you have done an outstanding job for a customer for years, a few late deliveries, late pick-ups or rude drivers washes all that away in a heart-beat. Be consistent or "You Lose".

Success and Good Health to All,
Jim
For more information on How to Start and Operate a Courier Service, visit me at www.deliverybizinc.com Blog http://jims-ideas.blogspot.com