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Gas Pains

June 2004

Skyrocketing gas and diesel fuel prices throughout May have growers in the industry watching the pump gauge carefully before they try to anticipate their next move.

"We haven't changed anything. We've been trying to be as efficient as we can be with our delivery routes," says Deena Altman, co-owner of Altman Plants in Vista, Calif. Her company has somewhere between 75 and 100 delivery trucks on the road between their Northern and Southern California, Arizona and Florida operations. "But we're having to, unfortunately, absorb the cost right now. We're in season and so it's just too late to make too many adjustments."

Her company is watching the price of diesel rise steadily in California - at press time the average in the state was an eye-popping $2.42 a gallon.

California is by far exhibiting the highest increases across the country, with the Midwest faring a bit better with $1.77 a gallon in Michigan. The East Coast is looking at somewhere in between with $1.80 a gallon in New Hampshire and $1.92 in New York. South Carolina has the cheapest diesel prices so far at $1.65 per gallon.

Doug Cole of D.S. Cole Growers in Loudon, N.H., noticed a 12-cent increase in diesel costs just in a 15-day period in mid-May. And though he already charges a flat drop fee for delivering finished plants, he's waiting to see if that's going to be enough to cover increasing diesel costs for his fleet of five trucks.

"In the last two years we've had a $20 drop off fee, and I guess we're a little leery on making that higher, but if it goes this way and continues up and up and up, we may have to," he says.

Mike Fettig is in charge of shipping and receiving materials at Glass Corner Greenhouse in Grand Rapids, Mich., and he's already upped the per-mile payment to the owner/operators he contracts with for deliveries.

"As the prices have gone up, I saw that they were going to go up, so we basically raised the pay per mile five cents more," he says, adding that he also adds on a 3 percent compensation over the per mile payment for any other costs, including increases in fuel.

Glass Corner also has tried to come up with new ideas to cut down on shipping costs, like a taller rack that holds more plants, and a Master Box that holds more plug trays and can be shipped by FedEx to far away accounts. "But we're constantly trying to come up with ideas," Fettig says. "I'm starting to run out of them."