Jason Sandefur

Hit with skyrocketing fuel costs, Heads & Threads International will implement a fuel surcharge (FSC) on all prepaid shipments beginning August 1, 2008.

“HTI has experienced a 21% increase on outbound freight paid shipments over last year and over 40% over a few years ago,” the company said in a statement. “This increase is a direct result of a fuel surcharge (FSC) that all carriers have implemented.”

The company noted that the national average cost of diesel fuel recently exceeded $4.72 per gallon, up over $2 per gallon from a year ago and over $1 per gallon since March.

The FSC will be a rate per pound multiplied by the total weight of the invoice and will appear as a separate line on the invoice. The FSC will not be added to collect, will call or prepaid and add shipments.

HTI said it was adding the FSC instead of including the cost of outbound freight in its selling price because “carriers are adjusting their FSC up to 5% each week.”

“Trying to predict what impact the FSC will have on a given product line, so as to include it in our item price, could (depending on your product) artificially increase your total quote price,” CEO Michael Wrenn and sales vice president Rich Megliola said in a joint statement. “This is something we categorically oppose.”

HTI said it will continue to prepay shipments per our current freight policy and will ship collect using the carrier of a customer’s choice.
The FSC will be directly linked to the cost of diesel fuel and the carrier’s FSC, meaning it will rise and fall with the U.S. National Average Diesel Fuel Index, which is published by the Energy Information Administration of the U.S. Department of Energy.

Both Wrenn and Megliola encouraged the industry to adopt a similar model, calling it an “absolute necessity” for all distributors.

“We firmly believe that the time has come for the Fastener Industry to adopt its own FSC separate and distinct from the cost of the product itself.” Web: headsandthreads.com �2008 FastenerNews.com