Doing Business with Us Credit Application News News Archive Article Search Advantage Luck Stone Announces Fuel Surcharge by John Leonard September 12, 2005 Important developments regarding Luck Stone contract hauling services: Effective September 6th, Luck Stone raised haul rates by $.45/ton for all deliveries through our contract haulers. This occurred at all plants with the exception of Leesburg, Goose Creek, Fairfax, Bull Run, Bealeton, Culpeper and Spotsylvania. Additionally, longer hauls in excess of 50 miles will be subject to higher adjustments. This immediate action will support our haulers’ financial security during these uncertain times, and help to ensure timely delivery of your material. It is important to note that all delivery charges are paid directly to our contract haulers. On November 16, 2005, a fuel surcharge system will take effect at all Luck Stone plants. This system will be based on the U.S. Department of Energy’s weekly fuel index. It will allow our delivery charges to move up or down with the price of diesel fuel and is a longer-term equitable solution for our contract haulers. Fuel Surcharge Calculator Why did Luck Stone raise the haul rates on September 6th? We are all familiar with the sharp increase in fuel prices this year. In September of last year, gasoline and diesel were about $1.70 and $1.60 per gallon respectively. This year we’ve seen an increase of over 100% for both. Luck Stone utilizes the services of contract haulers to move products from our plants to our customers’ locations. Every day these haulers use a great deal of diesel fuel in the delivery process. With fuel prices jumping so rapidly, these haulers were losing a substantial amount of money because of the huge gap in quoted haul rates and the actual cost of fuel. By taking immediate action we are able to continue to find haulers willing to contract with Luck Stone and to ensure that your material arrives in a timely matter. How long are these immediate increases effective? These immediate increases in haul rates will be in effect until a fuel surcharge is implemented. At this time Luck Stone will rescind the $.45/ton additional haul rate and then implement a longer term, more equitable solution for all parties in the form of a Fuel Surcharge (please see below for more info on Fuel Surcharge). How does Luck Stone manage these charges for the contract haulers? For customers desiring a delivery service with their material, Luck Stone contracts with haulers to fulfill this service. Haulers are paid by Luck Stone every two weeks for services rendered. We invoice our customers for the material and delivery charges twice per month. The delivery portion of the invoice is paid directly to the haulers: Luck Stone does not retain any portion of these delivery charges. When will the Fuel Surcharge take effect? Luck Stone’s Fuel Surcharge will take effect November 16, 2005. What is the Fuel Surcharge and how does it works? Most industries that offer a delivery service use a fuel surcharge system to fairly raise and lower delivery charges based on the price of fuel. Luck Stone’s Fuel Surcharge will trigger when diesel fuel hits $2.90. This benchmark and will be monitored using the weekly fuel pricing report issued by U.S. Department of Energy (DOE); this is a common source for this objective information. (Luck Stone will be using the Lower Atlantic Regional pricing.). At $2.90 per gallon, Luck Stone will implement a Fuel Surcharge of 1%. Then for every $.25 over $2.90/gallon, Luck Stone will add an additional 4%. This fuel surcharge protects contractor haulers against radical fuel price changes. If fuel jumps up quickly, they get a larger jump (4% vs. 1%) at a time. It also protects the customers if fuel is fluctuating between $.04 and $.06 in a week’s time, they don’t have to worry about re-bidding or losing money. They only have to worry about the large swings, too. Currently, Luck Stone is reviewing the base rate and the incremental amounts for the surcharge for the benefit of all parties. If used effectively, the base rate and incremental amounts can be used to help plan for future jobs. How long will the surcharge system last? We will be using this system into next year and potentially beyond, as many experts on fuel and its impact on the economy expect heavy world-wide demand for petroleum and higher prices for some time to come. Who can I contact with specific questions? John Leonard may be reached at 804-784-2415; Steve Curtis can be reached at 804-641-9667. You can also email questions to contact@luckstone.com. Luck Stone Corporation • P.O. Box 29682 • Richmond, VA • 23242-0682 • 1-800-898-LUCK Terms of Use | Privacy Statement