Hartung Glass Industries notified customers that it increased its energy surcharge to 16% for West Coast and Mountain West area customers, effective Jan. 18, 2023. The Tukwila, Wash.-based glass fabricator announced the increase will be reevaluated at the end of this month, with a possible adjustment in February 2023.
Officials say the company was forced to increase rates after flat glass suppliers announced an “unprecedented increase to the energy surcharge for their Western region deliveries of nearly 300% per truckload effective Jan. 1, 2023.”
The increase results from unseasonably cold winter weather that has produced natural gas supply shortages and rapid spikes in suppliers’ natural gas input at Western region facilities, say officials from Hartung.
To mitigate the severity of the impact, Hartung officials state that the company must adjust its energy surcharge to help offset costs while “absorbing much of the increase given its magnitude.”
According to Bluestar Architectural Glass president Alex Oanono, who notified customers at the turn of the calendar that it lowered its January energy surcharge from 18% to 16%, the energy surcharge is based on energy and freight surcharges, with the “main driver being the truckloads of glass from glass suppliers as well as energy consumption during fabrication and shipping.” The calculation is based on natural gas, diesel fuel and freight.
Oanono says that natural gas cost calculations come from NYMEX LDS, while diesel fuel calculations are determined by the previous four-week average of Retail on Highway Diesel Prices, published by the U.S. Energy Information Administration. A freight surcharge is based on the previous month from the Cass Truckload Linehaul Index.
“Energy surcharges used to be much more stable, changing quarterly,” says Oanono. “Now, the cadence is monthly. Sometimes it goes up, other times it goes down.”