Fabricator fuel surcharge system lacks consistency for contract glaziers
A recent 7 percent price increase by several glass manufacturers may force many fabricators to recalculate the surcharges they pass along to their own customers. These recalculations, however, can prove tricky for contract glaziers, says Bob Rushing, pre-construction manager for Architectural Aluminum Techniques in Orlando.
The problem is inconsistency, Rushing says.
Companies pass along additional costs to contract glaziers through a variety of methods that vary among fabricators. Some institute a flat fee per truckload, some use a cost per square foot of material, while others calculate a percent of total order.
“There’s no real consistency,” Rushing says. “If I bid a job with one vendor and then change to another, I have to be sure that I understand their surcharges.” To add to possible confusion, most companies don’t follow a specific time line when changing surcharges, he says.
The variations are understandable, as fabricators "have to figure out what the bulk of their business is and how they can apply a surcharge that works for them.” However, the variations can create frustrating and confusing bid calculations for glaziers, Rushing says.
To allay this confusion, one New York fabricator decided to create a customer-friendly method of cost increases and has started using it as a marketing tool to glaziers.
“A few years ago, we made it our goal to turn [Colonial Mirror & Glass Corp. of Brooklyn] into a Saturn dealer,” says John Rotchford, Colonial’s operations manager. “We basically say: here’s our price list, and rank customers by tier, so they know exactly what they’re going to pay.” As surcharges come in from suppliers, Colonial absorbs some of the added costs and incorporates the rest by raising the cost of products on the list. Colonial managers try not to react to every quarterly surcharge change from its suppliers and only raise prices when necessary, he says.
“Our competitors have these surcharges listed on invoices, and sometimes not at all,” Rotchford says. “But we have no surcharges. What we have is an order-to-delivery price.”
Rushing says that from a contract glazier’s point of view, “it would be easier if they rolled it into the price, and we wouldn’t have to stop and go back to recalculate each time.” However, any method would probably work as long as “everybody does it the same way,” which, he admits, remains unlikely.