Jobbers World News
June 9, 2008

  • Lubrizol to hike prices up to 20%
  • ServicePro Makes Exciting Announcements
  • Shell Adds "Temporary Fuel Credit" to Buyback Fees

  • Lubrizol to hike prices up to 20%

    Lubrizol Corp announced on Friday of last week what it calls "a global price increase" for all its product lines, effective June 16.

    Lubrizol said the majority of the increases will be in the range of 12% to 20%. The actual price increases will be dependent upon the specific product's exposure to increasing raw materials costs and energy-related production costs. Lubrizol said it will review all terms with its customers.

    Lubrizol said the pricing action includes previously announced price increases currently being implemented in the Lubrizol Additives segment and in certain Lubrizol Advanced Materials product lines.

    In discussing the price hikes, Lubrizol chairman, president and CEO James Hambrick said in a statement, "Our raw material and energy costs have been impacted significantly by the unprecedented surge in crude oil and natural gas costs, both of which have increased over 40% since early 2008. We continue to execute strategies designed to improve efficiencies and reduce operating costs, but it is essential that we implement price increases to recover these cost increases and sustain our viability as a valued supplier to our customers and their industries."

    JobbersWorld Editorial: For the few distributors that may not be familiar with Lubrizol, Lubrizol is one of the four leading suppliers of lubricant additives to the US market. And when you consider the number and magnitude of price hikes already pushed through on finished lubricants this year, together with the fact that additives account for roughly 40 to 50% of the cost to make an engine oil, Lubrizol's announcement is certainly cause for concern.

    ServicePro Makes Exciting Announcements

    The Association of Independent Oil Distributors (AIOD) met with its members last month in Cleveland, Ohio where it made several exciting announcements. According to Doug Roberts, Executive Director for the association, the first announcement was that AIOD's ServicePro brand of engine oil will be transitioned from conventional to synthetic blends by July 1. This transition applies to its 5W-20, 5W-30, and 10W-30.

    The company also announced the launch of it's new online virtual training center "VTS." According to Roberts, AIOD teamed up with Ziglar Training to bring revolutionary technology coupled with the best of today's training and education." The training center is designed to deliver product, marketing and skill development information in an interactive format 24/7. In addition it provides real-time tracking and reporting to AIOD members in a consistent and user friendly format.

    Roberts says the virtual training center has five product categories to chose from and one skill development category "fueled by proven Zig Ziglar principles." The skills development category includes training on sales skills and relationship strategies. Each training module includes testing and scoring to assure mastery of the subject mater.

    Shell Adds "Temporary Fuel Credit" to Buyback Fees

    On June 6th Shell announced it will incorporate a "temporary fuel credit" to its buy-back fees. The credit will provide Shell's distributors with an additional $0.06 a gallon on lubricants and $0.01 a pound on grease. According to Shell, the credit is provided in response to the rapid escalation in the price of diesel fuel and the impact this has on the costs to deliver buyback business.

    The temporary fuel credit is effective July 1 and Shell has reportedly told its marketers it reserves the right to withdraw the credit in whole, or in part, based on market conditions.

    Bravo Shell for being the first major to directly address the impact fuel costs have on buyback business. And for those that subscribe to the full version of JobbersWorld, please take the time to read the cover story "Burning Fuel and Profits." Because whereas Shell's temporary fuel credit is a major step in the right direction, other marketers can be losing big bucks while their suppliers study the impact of higher fuel prices on the cost to deliver buyback business.


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