Are any of you raising prices yet due to increased fuel costs?

[DR Buck]

I raised my board foot rate for custom sawing to 30¢ last year. Now along with increased fuel prices everything else is also going up, I'm thinking of increasing another 5¢.  I already had tacked on a mileage charge to go over 50 miles, which I may drop if I raise the sawing rates.

Another area I need to rethink is my kiln drying costs.  Up till now I've been getting 50¢ a board foot for drying.  My kiln is the Wood-Mizer DH4000 (Nyle200). Today the power company announced rate increases beginning in July.  The increase is going to be "20% or more"  

How are you other custom sawyers handling all these cost increases?  If you increased rates, how much has it hurt your business?

[Dan_Shade]

I'm having the same conundrum, but the fuel costs don't hit me too much really, I can saw around 1800-2000bf or so on 5 gallons of fuel, which comes out to around a penny a board foot in fuel costs.  It hurts me more getting the mill to the job site. 

[woodmills1]

I have actually lowered or kept my prices the same to keep business.  I feel costs are up but ifn ya doesn't get checks ya goes outta business.

[Cedarman]

The phone is ringing steady with orders.  I haven't raised lumber prices in about 2 years.  I would be looking at about a 5 per cent raise on most items.  I raised prices on peeled poles and one customer said too high.  If no one ever says too high, then I am too low.  I think people now expect prices to go higher,  fuel increases will be passed on, so there should be less negative feed back. 

[DR Buck]

It hurts me more getting the mill to the job site. 

Yea,  that the cost I was addressing.   In the past, my milling rate covered that.   Also, since I use resharp, I'm going to be hit there as well.  UPS prices are up and they are adding on "fuel adjustment" fees.

[Bibbyman]

We don't saw mobile and have an electric mill so we have some insulation so far on energy costs.  But we do run about 25 gallons a month of diesel through the loader and tractor. 

But the bigger expense is that we deliver to most of our commercial customers.  We were not charging for that service as we charged the same for our lumber to them as we would a "drive up" customer.  And they buy a good bit of volume on a repeat basis.  But Mary has now started to add a delivery fee to any new customers and have added it to some, but not all yet, of our old customers.  It amounts to about a dollar a mile – maybe enough to cover fuel costs.

Also the trucking fees have went up when we send out a trailer truck load of lumber.

[thecfarm]

It's not just fuel,it's parts too.Things wear out.That belt is made out of a oil product.Everything has or is going up.Cost more to do things now.I was much better off last year with money than I am now.Everything cost so much now.Makes it hard to make a dollar and keep it.

[Dan_Shade]

I made up a spreadsheet to help figure mileage costs, it may still be missing a few things, but I think I have captured most of the expenses.  It's attached. 

Have you figured up your "per board foot cost" of sharpening bands?  I know I cut myself short in this area, I figure it costs me about $0.01 to $0.02 per board foot for band costs

[fencerowphil (Phil L.)]

In my piano business I have always worked in routes, trying to do a day's work per route.
Now,  I charge my new or intermittent customers a reasonable travel fee.  The good yearly
customers don't get charged.  Work on minor repairs which I used to just "throw in" for a
regular customer now is charged by the actual minutes of added time.  I guess you could say
I am just tightening up the fee system right now, but the end result is higher prices in general.


In the sawing, I am about to set-up for an extended stay across the county road from my
pallet wood customer.  It will be, in effect, free rent for space to saw, and he will save the
cost of transporting which he has incurred lately, following me where ever I am to pick-up.
[Did this guy just say 'pallet wood'? Hey, it's money.]  Since Shawn doesn't have a license,  a day
will often require two trips to this nearby location.  This means 30 minutes a day driving time
and around $15 per day fuel to get to the site.  The saw would be more like $12 per day.
This will be win-win, since both the customer and I will reduce vehicle fuel costs considerably.

Any portable job now I will encourage to convert to "my place."   If they don't, then they will
have to have a pretty good stack of logs - at least 50 - for me to go to them.  I will analyze
the travel and simply charge a fee for it.  With prices shooting as they are,  I will just wait and
see what that fee will be, based on my ability to integrate piano travel with the saw travel.

Phil L.

[DR Buck]

made up a spreadsheet to help figure mileage costs,

Dan,

You sure make it easy for someone to figure out you're an engineer.  :D

Anyway, the chart looks good.  Other than the cost difference for diesel most of my numbers are the  same as your's.     Also, my band cost are a little higher, as I have shipping cost for resharp.  I'm guessing it's around 2.5¢  - 3¢.  That's averaging 400bf per band change.

[Dan_Shade]

I'm working on one for board foot costs for running the saw.  that one is a bit more complicated because of many more swagged variables.

[ely]

i am still sawing at .25 per bd ft. i do not go mobile so i guess i will keep on keeping on. i also do not saw for the public near as much as some of yall.

[CLL]

I just went up about 2% because of the extra fuel it takes to get the cedar to my mill, and because its slower sawing, thus more fuel.

[fencerowphil (Phil L.)]

Dave,

Not being a spread-sheet-literate guy,...

is a "swagged variable" the same thing as...

a "hangy-down part?"


:D

[DR Buck]

is a "swagged variable" the same thing as...

a "hangy-down part?"

I think it's engineer speak for pulling it out of your a$$.   ;D

[Dan_Shade]

swag is a term I hear pretty often in my field, it means "scientific wild butt guess"  

sometimes it's tough to pin things down to an exact science, and running a sawmill is definately one. At least it is at out level, i'm sure some of the larger mills using optimization programs have it down pretty good.

[Part_Timer]

.35 per bf now.  yes I've slowed down but that is a good thing.

[Cedarman]

I think we are seeing inflation beginning to take off.  Remember stagflation during the Carter years and the pain that followed.  Prices are going up and will go up more.  Either you have to raise prices to stay even or productivity must increase.  Every part you buy, belts, tires, bands, etc will be going up.  It is extremely important to have a handle on your expenses to see how you are doing financially.  If the market will not let you raise prices, then tight times are coming or it is time to change business plans.

[Sawyerfortyish]

I just can't see how you guys that are charging .25-.35 a foot to saw can exist. I looked at dans spread sheet one of the things left out was mill replacment. I know equipment taken care of will last a long time but sooner or later you'll want to upgrade. I have raised my prices twice in the last 6 months. Everything and I mean everything has gone up and up. You guys keeping your prices the same must love busting your hump to keep up. But for me I'm not paying more for logs,fuel ins,ect just to keep a few customers happy. Raise your prices and they still will come. I run a circle mill so things may be a little differant for me. I'm an hour and a half from New york city so there is money in my area. I have not slowed down one bit I have gotten so busy  I can't keep up.

[Corley5]

Stumpage rates are going to have to go down to cover logger's expenses because the price of logs at the mill isn't going up  :(

[Russ]

My question is when are the box stores going up on their prices ? Leader home center is selling framing lumber for $.31 pbf how can compete when pulp is $180. a thousand ?

[Chuck White]

I've raised my price from $140/1000bf to $150/1000bf.

Only had complaints from one customer.
The rest have pretty much said "well, what else can you do"!

If oil prices go back down, you'll see my price go down too!

[ellmoe]

I've raised my price from $140/1000bf to $150/1000bf.

   Wow! Chuck, you can come saw for me full time whenever you wish! I'll even buy the fuel!

Mark

[Chuck White]

ellmoe
I called other sawyers in this area early this spring and $150/1000 is the going rate around here!

I guess it all depends on what part of the country you're in!

[WDH]

Stumpage rates are going to have to go down to cover logger's expenses because the price of logs at the mill isn't going up  :(

Stumpage prices have gone down seriously down here, especially for pine.