- The Washington Times - Tuesday, July 3, 2001

Motorists are enjoying a slight relief in their wallets, but many businesses say its still necessary to tack on extra charges to cover their fuel costs.

For example, three of the largest delivery services United Parcel Service, Federal Express Corp. and Airborne Express are charging customers a 1.25 percent to 4 percent surcharge for their services.

"We can't speculate on any change in the surcharge," said Ed Coleman, a Federal Express spokesman. "Fuel charges still remain high."

Jet fuel hovered around 80 cents per gallon a year ago, gradually increasing to nearly $1.20 in November. The cost has been on a gradual decline ever since, according to the Bloomberg index of jet-fuel prices. As of yesterday, jet fuel cost 71.83 cents per gallon.

Gasoline prices also have come down a bit. As of Friday, the average price in Washington for a gallon of self-serve unleaded gasoline was $1.65, down seven cents from May 18, according to the AAA.

On the national level, gasoline prices are averaging about $1.474 down nearly 24 cents from mid-May, according to Department of Energy figures released yesterday. The price dropped about 6 cents from a week ago.

Federal Express has added a 4 percent surcharge to the price of shipping a package domestically and internationally since April 2000.

For example, a 5-pound box, sent from Washington to Baltimore for Federal Express overnight delivery, will cost $21 plus an 84-cent fuel surcharge.

The company's ground service, which usually takes three to five business days for delivery, is still a cheaper alternative with a 1.25 percent fuel surcharge added to its shipments. That surcharge has been in effect since August.

United Parcel Service has had a 1.25 percent fuel cost on all of services, from air and ground to domestic and international deliveries, for nearly a year.

"It's obviously making up for the additional fuel costs," said Steve Holmes, a UPS spokesman. "There's no question that fuel is an ongoing issue."

Airborne Express added a 3 percent fuel charge in April 2000, but that wasn't enough to cover additional fuel costs, the company said. So the Seattle-based company added another 1 percent charge in October. The 4 percent surcharge is currently in effect.

The airline industry was one of the first industries to tack on a noticeable fuel surcharge last year.

The top five U.S. airlines Continental, AMR Corp.'s American Airlines, Delta Air Lines Inc., UAL Corp.'s United Airlines and Northwest Airlines first raised fares by adding a $20 round-trip surcharge in January and then topping it with another $20 round-trip charge in September.

"When gas prices go high, it's easy to add on a fuel surcharge because people understand it," said Jim Peppe, airline analyst for OneTravel.com. "When prices go down, [the extra fees] almost never come off."

Airlines are still including fuel surcharges in their ticket prices, Mr. Peppe said.

The American Moving and Storage Association created a fuel-surcharge system in May 2000 that determines how much its member companies should charge for fuel based on the Department of Energy's monthly report on the average price of diesel fuel. Currently, the surcharge is at 4 percent.

The system serves as a guide for its 2,800 member moving companies. They decide if they want to add the surcharge to their clients' bills.

Diesel fuel, which hit record highs last year, is at $1.407 about 11 cents less than a month ago, according to the Energy Department.

The D.C. Taxicab Commission, the District's agency that regulates the industry, first raised fares by 50 cents in spring 2000. A second increase of 25 cents came in August 2000 and the final increase to $1 was added in December.

The commission, however, dropped the emergency fuel charge at the end of April, but a month later raised its rates by 25 percent, citing unstable fuel prices as one of the reasons for the increase.

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