PetCorps to Implement Transportation Fees

Gas Pump

Gas PumpTo offset a rise in fuel costs this summer, PetCorps will implement a temporary fuel surcharge on all services beginning in May and ending in October.

The fuel surcharge will be applied as a separate charge on customer invoices apart from the regular price for waste removal, pet sitting, and other services.

The decision comes after the recent increase in fuel prices in the Elizabethtown and Louisville markets. Based on a forecast report from GasBuddy, PetCorps owner Jason Smith said, “A transportation fee is necessary to continue serving our customers.”

GasBuddy 2015 Gasoline Forecast
GasBuddy 2015 Gasoline Forecast

The transportation fee will be calculated to minimize the overall charges customers receive. Customers will be charged 57.5 cents per mile for their “fair share” of the average miles driven.

First, the sum of the distances from PetCorps to each customer on a route are averaged. Then, the distance for each customer is divided by the total miles to find the percent of total miles. The percent is multiplied by the average miles to determine the miles billed.

For example:

Customer Distance % Miles billed
A 9 37.50% 3.0 mi
B 8 33.33% 2.7 mi
C 7 29.17% 2.3 mi
TOTAL 24 100.00%
Average 8.0

Calculating the final price that will appear on a customer’s monthly invoice depends on the frequency of service.

For example, if customer C is a twice-a-week customer, the total miles billed each week is 4.6 miles (2.3 times 2). We first multiply by the mileage rate to get the weekly fee. The weekly fee in this example is $2.65. We multiply this by 52 weeks and divide by 12 months to get the transportation fee. In this example, the monthly transportation fee is $11.48.

If customer A is a biweekly customer, the total miles billed every two weeks is 3.0. The biweekly fee is $1.73. We then multiply this result by 26 two-week periods and divide by 12 months to get the monthly transportation fee, which is $3.75 in this example.

Finally, if customer B is a once-a-week customer, the total miles billed each week is 2.7 miles. The weekly fee is $1.55. Multiplying by 52 weeks and dividing by 12 months yields $6.72 in transportation fees each month.

This method minimizes the transportation fees passed on to the customers and prevents monthly fluctuations caused by 4 or 5 week months.

At the end of September, PetCorps plans to remove the transportation fees as fuel prices begin trending downward. The company will continue to absorb transportation costs from October through December; however, if prices consistently trend above $2.509 per gallon after that time, permanent transportation fees may become necessary in 2016.

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