Lower Pump Prices = Silver Sales Lining?
By Eric Anders • Dec 31st, 2008 • Category: MOVE MANAGEMENT
Have falling gas prices affected the number of physical surveys that you or your company is performing?
Relocation advisors have always recommended that an onsite estimate performed by a qualified professional is the preferred option for determining unique service requirements and moving costs. Unfortunately, as energy prices escalated the offer to ‘have a look around’ became directly tied to the size of the home and type of customer being moved.
When the economy began to sink, the typical full service corporate relocation packages managed by global third party management companies began to shift to a more basic, ‘do-it-yourself’ lump sum benefit managed by inexperienced transferees. Many of these price conscious consumers were surprised at the general reluctance of industry salespeople to perform a competitive, in-home inspection without some sort of pre-commitment.
When gas prices hit record levels earlier in the year, responsible moving company owners were forced to adjust their sales compensation with a fuel allowance. In fact, with the rising energy prices, more and more household goods relocation service providers have taken advantage of part 375.403 of the Consumer Protection Regulations by implementing a charge for their written binding estimates. This fee might be collected either from the customer or invoiced internally to other participating agents or service suppliers.
Despite the fact that the average price at the pump has fallen almost every day for the last three months, the fuel surcharge rates being charged customers aren’t tumbling as fast since the cost of diesel doesn’t drop as fast as gasoline. What has fallen is the amount it takes for estimators to fill up.
In November, the Internal Revenue Service (IRS) announced the new national per-mile business driving rate of 55.0 cents for the U.S. taxpayer, effective January 1, 2009.
This new rate compares to the rate of 58.5 cents-per-mile that was in effect from July 1 through December 31, 2008 but is still higher than the 50.5 cents-per-mile that was allowed for the first half of the year.
According to the latest Energy Information Administration report “The average U.S. prices for regular-grade gasoline and diesel fuel, at $1.70 and $2.52 per gallon respectively on December 8, were both more than $2 per gallon below their highs in mid-July. With the assumption of a fragile economy throughout 2009, along with lower projected crude oil prices, annual average retail gasoline and diesel fuel prices in 2009 are projected to be $2.03 and $2.47 per gallon, respectively.”
Today the average price of a gallon of gas in the U.S. is $1.61 per gallon. Has this drop in price encouraged salespeople to be more willing to look at smaller households? Are they going farther to do perform an estimate?
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