I'd imagine that like other industries, the increased cost of gas gets passed along to clients.

Fuel surcharges do not EVER EVER equal dollar for dollar reimbursement.

ES

you thought starbucks was getting hit bad by the recession... imagine the poor truckstop hookers!

nycll said:iSeller said:I'd imagine that like other industries, the increased cost of gas gets passed along to clients.
It is not that simple or instantaneous. Even gas stations having trouble passing the higher cost to their clients.
In our state they can change the price 3 times per day. How could they possibly not keep up?

cmv said:nycll said:iSeller said:I'd imagine that like other industries, the increased cost of gas gets passed along to clients.
It is not that simple or instantaneous. Even gas stations having trouble passing the higher cost to their clients.
In our state they can change the price 3 times per day. How could they possibly not keep up?
Maybe from people buying less gasoline?

cmv said:nycll said:iSeller said:I'd imagine that like other industries, the increased cost of gas gets passed along to clients.
It is not that simple or instantaneous. Even gas stations having trouble passing the higher cost to their clients.
In our state they can change the price 3 times per day. How could they possibly not keep up?Because if gas retail prices were anywhere near as volatile as the COGS the consumers would be furious.

Retailers in many times go inverted on the price and have to keep the margin for as long as possible to get back to break even and then to make money.

This is a big problem in Wells, NV right now. Discretionary income is down. My buddy stopped in at Donna's Ranch for a visit last month and the pro sex workers had left town, those that remained in the lineup were not star material. He left unfulfilled. Another indy trucker friend recently sold his rig and retired - he says he can't make any money because of fuel costs. More fallout to come...

ArbolLoco said:you thought starbucks was getting hit bad by the recession... imagine the poor truckstop hookers!

ryancmor17 said:ElectricSavant said:

Could the last of the "American Pioneers" be coming to an end?


Rails cannot deliver just in time as line hauls can. Business cannot simply wait for there goods to arrive and hope they show up when there needed.

I actually have no idea what the right answer is, but I would think that it'd be just the opposite. Look at how timely the rail systems in other countries are. Arrival times would be almost exact, and more direct train routes would mean quicker delivery. Surely it would take decades or a ton of federal money to get the correct infrastructure in place, but in time I have no doubt that rail could become preferable to trucks.

ETA: And if we had the rail system of Europe, I'd love to get rid of my car and use it. When I was in Europe, taking the trains was cheap, quick and efficient.

I knew an owner of a Mobil Station years ago when they installed the vapor recovery systems ....this was like 30 years ago...and I remembered him saying oh yeah...I first meter the fuel in and suck it back out and charge for it again...I laughed and told him to put a sign up to his customers saying "topping off is allowed"!

ES

TheMeliorist said:mcomstock said:This is a big problem in Wells, NV right now. Discretionary income is down. My buddy stopped in at Donna's Ranch for a visit last month and the pro sex workers had left town, those that remained in the lineup were not star material. He left unfulfilled. Another indy trucker friend recently sold his rig and retired - he says he can't make any money because of fuel costs. More fallout to come... More info here.

As for gas stations, I believe on average they only make 3% on regular unleaded. Of course how much an individual station charges is mostly determined by competition: I know a lone gas station right at an interstate exit in a wealthy area that charges 10% more than its nearest competitors 3 miles away. Similarly, in areas where there are too many gas stations, they may charge below their cost just to poach customers. I think its worth nothing that people tend to budget and live based on past experience, so they tend to be price sensitive on products that have increased significantly beyond their expectation. That and they are currently strapped for cash in general. So, even though the area is wealthy, I bet the volume at my example gas station has decreased considerably (as people drive the extra 3 miles to save 40c/gal) until they drop to a more reasonable premium (5%?, only the market knows)

In general, gas stations actually make their money on the items sold in their convenience stores, some of which have 100% markup. When gas was $2/gal Joe Sixpack would get $10 of junk with his $30 of gas. Now that he's consistently spending $60 to fill up, he's had to cut out that $10 of junk (lottery ticket sales may have remained but they are low margin). So basically gas stations are closing down because their business model no longer works. When enough competition has left the market, the remaining stores will reorient themselves to a new model: higher margins on gas, lower margins on convenience items (to entice more sales), less refrigerated/frozen items, etc.