July/August  2001

Gas prices are reaching record highs. Auto Glass Companies Struggle with Rising Gas Prices
Fueling Up
by Penny Beverage

It’s a problem affecting everyone, from school buses and pizza restaurants to freight companies, airlines and, of course, auto glass companies: the fuel crisis. Gas prices are soaring across the nation, making everyone wonder if it will ever get any better. Some expect that it can’t get worse, while others expect it to soar to a minimum of $3 a gallon. In Parkersburg, W.Va., Napoli’s pizza has begun charging customers for delivery service for the first time ever. Most freight companies have also implemented a charge for the gas that they expend in their travels on our nation’s More companies are charging higher prices for their products to cover the rise in fuel. highways while delivering goods of all sorts. Many news reports speculate that summer vacations will hit an all-time low, with families that normally drive far and wide trying to save money on gasoline.

Late last year, wholesale glass distributors instated a fuel surcharge on all glass deliveries (see AGRR’s sister publication, USGlass, November 2000, page 20). Now, it’s hitting the shops, which must not only pay the surcharge, but must also keep their business’s vehicles filled with gasoline, sometimes spending more than $500 in a week just for fuel.

Too Early to Notice?
While consumers everywhere are feeling the tug at their wallets, auto glass shops have mixed responses as to whether rising fuel prices are affecting them yet. Some say that it is definitely a problem and is only getting worse, while others shirk the matter off, saying their businesses are doing so well that a few extra dollars here and there on gasoline could not possibly hurt them.

Robert Correll, general manager of Glass in a Flash in Montgomery, Texas, said that the gasoline prices have affected his business already. “You’ve got to try to absorb the costs somewhere and you have to figure out how to do that,” he said.

Correll’s shop utilizes three vehicles for mobile service and spends approximately $350 a week on gasoline alone, compared with about $270 a week at the same time last year.

Sue Cook, manager of Mobile Glass of North Carolina in Raleigh, N.C., has seen the same increase—$80 a week—and agrees that the problem could soon be a detriment to her business. “To take care of the customers, we have to use a lot of gas,” Cook said. “They don’t all fall straight in a line—you end up going north then south then east then west then north again sometimes.”

Carla Maune, owner of Mobile Glass Service in Washington, Mo., said she has had several insurance companies ask her to provide mobile service, and yet gas is never figured into what they pay to repair or replace a windshield. “The worst part is that these insurance companies expect you to provide mobile service, but you don’t get compensated for your gas,” she said.

Carol Connell, president of Mobile Glass USA Inc. of Alpharetta, Ga., is finding similar effects on her almost completely mobile business. “I would say that on every windshield we install, we would have to increase the cost of that glass $5 to $10 to compensate for the fuel,” she said.

In Salida, Colo., where gas is approximately $1.84 a gallon, Eniece Dunn, the office manager for Heides Mobile Glass Inc., says she’s seeing some effects, but nothing too dramatic. “Right now it’s not anything that’s going to make or break the glass industry, but it is putting a pinch on a market that has already been pinched a lot,” she said.

Although technicians for Heides travel throughout a 100-mile radius to repair and replace windshields, Dunn said that the worst effects she has seen so far have been the fuel surcharge the company is compelled to pay on the glass it orders. “We’re having to pay a surcharge on all of the glass we get, from windshields to flat glass, so we’re trying to absorb it right now,” she said.

Who Has the Answer?
While Parkersburg, W.Va.-based Napoli’s has gone the dramatic route and has instated a fee for every pizza it delivers, most auto glass companies are hesitant to do the same. But that doesn’t mean they haven’t considered it.

Some companies, such as Correll’s, pride themselves on the free mobile service they offer, so there is little they can do to offset the costs of fuel. “We advertise free mobile service, so we couldn’t turn around and charge for it,” he said.

Maune said she and her employees have joked about instating their own surcharge, but are trying other methods of absorbing the costs first. “We’ve talked about [adding a fee], jokingly at first, but if it gets too bad we’re going to have to do something to compensate,” Maune said.

Steve Brown, owner of Brown’s Mobile Auto Glass in Azusa, Calif., isn’t charging a fee specifically for mobile service, but has raised his prices slightly to accommodate the rising fuel bills.

Dunn’s shop is trying to cover the cost itself, for now, but expects to have to figure out something if the problem worsens. “Most companies are charging us a 7-percent surcharge, so if it goes much more than that we may have to pass it on,” she said. “We’ve talked about maybe raising all of our jobs, but both the windshields and the flat glass have suffered three 9-percent raises in the last 12 months, so we’re reluctant to add any more to that.”

Connell has already braved the waters and added a surcharge for mobile service. “We’re adding a small surcharge to invoices to compensate for the increase in fuel costs,” she said. Whether it’s in accordance with Southern hospitality or customers are just understanding of the problem, is not certain. So far, though, Connell said she has not yet received any complaints about the surcharge.

Jeff Allgood, president of Mobile Glass Service in Dothan, Ala., is trying another option—adding the fuel charge into the price of labor for the job. “We’re getting ready to go up on our labor rate to cover the cost of [gas],” he said. Allgood spends approximately $145 a week on fuel for three vehicles, which all conduct business within a 100-mile radius of Dothan in the surrounding rural Alabama towns and in bordering Florida and Georgia.

Brown, whose shop spends $60 a week in gas for one vehicle, has just raised his basic prices in an effort to compensate for the increase. “We’ve just raised the prices a little bit, so it’s not a huge problem,” he said. “It costs me an extra $100 a month, basically, so that’s not much to make up for.”

Before imposing fees on its customers for a problem as much out of their control as it is the shop’s, some shops are trying other solutions first, such as replacing its large, gas-guzzling vehicles with more energy-efficient ones.

Maune’s company currently uses a 1999 large Ford pickup truck, but she hopes to soon replace it with something more economical. “We’re still up in the air over it, but we want something that gets better gas mileage,” she said.

However, that is not an option for everyone, according to Dunn, whose shop utilizes a Dodge truck and a Ford diesel, and spends $120 a week for gas to complete 25 to 30 mobile jobs. “The problem is that glass is a heavy item by nature and we have to have the heavy-duty trucks to haul it, so we’re kind of stuck,” Dunn said.

Rather than adding a surcharge or replacing his vehicles right away, Walter Krause, general manager of Michigan Mobile Glass & Trim in Southgate, Mich., said his company plans to change its delivery system to save gas if the problem gets much worse. “We have our own delivery system among our shops, so we’d probably go every other day instead of every day and we might put two men on one truck instead of sending two trucks out to do the jobs,” Krause said.

Another way to make sure excess gas is not used is to stress to customers that they must show up on time for their own appointments. “Just guaranteeing that the customers are there before we go out to do it saves a lot of gas, rather than finding they’re not there and using gas coming back to the shop to call them,” Correll said.

If a shop can find a gas station willing to accommodate it, it can also get a gasoline account, which may result in a discount. Dunn’s shop has gotten a 10-percent discount on its gas for three years for buying it all from the some station under one account. Some gas credit card companies also offer such a service, in which you agree to put your gasoline on the gas card and purchase their brands of gasoline in exchange for a certain discount on each purchase.
Finally, there is the option of encouraging customers to come right to your shop, rather than calling for mobile service. Few, however, think this is a viable option. “We offer the customers that option, but nine chances out of ten they want you to come to them,” Connell said.

Maune agreed, “There are some customers that don’t mind bringing it in, but others just don’t want the hassle.”

Future of the Pump
While everyone agrees that the gas problem is growing and could soon turn into a full-fledged crisis, few know if there is an answer to the problem overall—not just for auto glass shops, but for the entire gasoline market.

Some suggest that the U.S. oil companies tap into more of their resources here in the United States. Dunn, who used to work for a petroleum company, advocates this suggestion. “They need to uncap some of the oil companies in this country and stop being so dependent on OPEC,” she warned.

Others, including Correll, advocate looking into other methods for fuel, such as cold fusion.
Still others think the answer to the problem lies within our nation’s capitol. “Call your congressman and lobby,” Connell said. “I certainly think acting upon things there will do some good.”

Finally, most agree that the only sure-fire way to save money on gas is to stop using it. “I know the only way to get the prices to stop rising is to quit buying it, but you’ve got to go to work, so you can’t do that,” Maune added. 

Feds Work to Help Small Businesses with Soaring Fuel Prices

While those like Carol Connell, president of Mobile Glass USA Inc. of Alpharetta, Ga., think lobbying is the best way to decrease fuel prices, the U.S. Congress is debating several bills currently which may not decrease prices, but could provide relief to small-business owners fighting the impending problem, according the Specialty Equipment Market Association’s Federal Legislative Update. For example, a bill that would allow small businesses to take out low-interest loans to compensate for soaring fuel bills was passed in the Senate and is now being considered by a House committee. S. 295 was introduced by Sen. John Kerry, D-Mass.

A Senate committee is considering another bill that, if passed, would direct the Secretary of Commerce to establish a program to make no-interest loans to qualifying small businesses to help remedy economic hardships caused by rising fuel costs. The bill, S. 286, was brought forward to the Senate by Sen. Dianne Feinstein, D-Calif.

The same committee also is debating a bill that would authorize the Small Business Administration to make disaster loans to assist small businesses that suffered or are likely to suffer major economic injuries as a result of soaring fuel costs. Sen. Barbara Boxer, D-Calif., authored the bill. 



Penny Beverage is the editor of AGRR magazine.

 

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