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If they raise prices to cover their costs, they risk losing customers.



Published: Fri, October 1, 2004 @ 12:00 a.m.



If they raise prices to cover their costs, they risk losing customers.

By CYNTHIA VINARSKY

VINDICATOR BUSINESS WRITER

YOUNGSTOWN -- Before you gripe about the latest price increase at the corner gas station, consider Ed Aey.

An owner of Ludt's Auto & amp; Truck Towing in Boardman, he's got 19 thirsty tow truck tanks to fill.

These days, with diesel fuel averaging more than $2 a gallon, Aey said fuel costs are taking a big bite out of the Boardman company's bottom line.

But like many area business owners who use a lot of fuel, he hates to risk alienating customers with a price increase.

Motorists who have an occasional car breakdown might not notice, he said, but Ludt's large auto dealership accounts definitely would.

Aey, who owns the business with his brother Scott and his sister Susane Tyler, said their high volume helps keep fuel costs in line by reducing the distance trucks have to travel. They try to keep a truck in one geographical location to cut travel time.

If diesel costs keep climbing, however, he thinks Ludt's will be forced to ratchet up its prices or add a fuel surcharge to offset the increases.

Prices

Diesel fuel is selling at an average $2.03 per gallon, up from $1.51 a year ago; regular unleaded gasoline is priced at an average $1.92, up from $1.58 last year.

With crude oil prices hovering around a record $50 per barrel this week, gasoline and diesel fuel prices are not likely to drop any time soon.

Carol Kurdilla said fuel costs have made it a rough year for Lone Wolf Freight Systems, a Girard-based business that contracts with truck owner-operators to ship steel across the country.

"You wouldn't believe the number of trucking companies that have had to close their doors in the past five years," said Kurdilla, who serves as president of Lone Wolf.

"People are getting out and looking for an entirely different business."

The company recently increased its fuel surcharge 20 percent, its first hike in quite a while, she said. Still, the surcharge only covers a portion of its fuel costs.

Kurdilla's dilemma is this: She can't raise rates as high as she needs to, or she'll lose business, but if her rates aren't high enough she'll lose money, and owner-operators won't work for her.

"We're looking for ways to be creative, to work around these increases, but it's gotten so high. It's hit every industry across the board," she said.

Bus company

The owner of Columbiana Coach Lines in East Palestine said escalating diesel prices are taking the fun out of the charter bus business.

"It's a scary time to be in business," said Kathy Dyke, who shares ownership of the small company with her husband, Lee. She recently filled a 550-gallon diesel storage tank -- at $2.01 a gallon, the purchase cost her more than $1,100.

It's the first time she remembers diesel fuel costing more than gasoline.

Dyke said she and her husband hate to raise prices, but their present rates are barely covering the company's expenses, which include driver salaries, insurance, advertising and office expenses, as well as fuel.

"If I charged people what I need to charge people, they wouldn't charter the bus because it would be so extravagant," she said.

"That's why some tour companies have sold out. They just couldn't make ends meet."

Premier Tour and Travel owner Ben Cricks said his Sharon, Pa., company hasn't passed its higher fuel costs on to customers yet because it quoted the tour fees before gas and diesel prices started to soar.

Cricks said he expects to increase future tour prices to reflect the higher cost of fuel.

"I just hope that doesn't affect our sales," he said.

Invoices doubled

Pantalone & amp; Son Towing in Niles has seen its fuel invoices nearly double over the past few years, said James Pantalone, operations manager of the family-owned company.

The business has a fleet of tow trucks, flat beds and light service vehicles. Some run on diesel fuel and others run on gas. "We're taking the hit on both ends," he said.

Pantalone's hasn't increased its rates for 18 months, but the idea is being considered. He and his father, Jim, who owns the company, are also using fewer trucks and extending customers' wait time as a way to cut costs.

"We've been trying to hold steady. We know our customers feel the crunch too," he said.

vinarsky@vindy.com




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