March 17, 2011
Fuel Surcharges, Effective April 4, 2011
March 17, 2011
To: All Industry Partners
Subject: Fuel Surcharges, Effective April 4, 2011
IIG has traditionally endeavored to contain increasing costs within our pricing regimen; however, the on-going escalation of Number 2 diesel fuel prices above $3.25/gallon compels us to introduce fuel surcharges on all IIG shipments, effective Monday, April 4, 2011.
We are continuing to work diligently with all of our logistics providers to keep costs to a practical minimum; hence, we will adhere to the following procedure:
1. The EIA (Energy Information Administration) of the DOE publishes a calculation of a standard diesel fuel cost by region (and US average) every Monday by 4 p.m. EDT. This is accessible on line at http://tonto.eia.doe.gov/oog/info/wohdp/diesel.asp.
2. Conferring with all of our logistics partners, we will review data in light of IIG's experience, i.e. lanes, rates, etc..., and provide a best value assessment of cents/mile per IIG plant location for that week. This information will be posted on IIG's web site, www.iig-llc.com, by noon MDT on Tuesdays. IIG Customer Service will also have this updated information by that time (information for this week is already posted).
3. Important: The fuel surcharge posted on the IIG web site and available from IIG Customer Service reflects the estimated charge at that time/for that week only. Customers will need to make their own assumptions about what the rate will be at the time of their actual delivery.
Note: We feel that it is fair and preferable for customers to assess their own needs rather than have IIG arbitrarily provide an estimate. Nonetheless, the information that is posted provides a useful benchmark.
4. The fuel surcharges will appear as a separate line item on the invoice and will reflect the actual charges at the time of shipment. This means that the charges will always be relevant to the real time market conditions for fuel and not depend on arbitrary formulae.
It is our belief and understanding that all of our mutual North American industry partners are very aware of the realities of today's global market conditions and that their cooperation can be expected. Nonetheless, we will continue to monitor this situation closely in order to maximize the value IIG can offer all of our stakeholders.
Please contact your IIG Territory Manager regarding any clarification or inquiries.
Kevin J. Mackinnon
Vice President, Business Development