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If oil is going down....why aren't pellets?

Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by strangemainer, Oct 16, 2008.

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  1. hearthtools

    hearthtools Moderator Emeritus

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    DONT THINK THE DEALER OR MILL IS TRYING TO TAKE YOUR MONEY FOR BIG PROFITS!!!!!

    they are lucky to make $30 per ton.
    this does not count the cost of storage yard (PELLETS TAKE A LOT OF SPACE)
    FORK LIFT
    People to load your truck
    LOSS PELLETS WET DAMAGE ect.
    They many phone calls and email they have to make to be sure pellets get to their yard.

    I have said this over and over
    the dealer Pellets are steady price NOT COUNTING TRUCKING

    it is the cost to get from the pellet mill to your pellet dealer that is NOT CHEEP.

    Our cost of pellets have gone up very little in the past 5 years.

    In the last 5 years the COST of TRUCKING has gone from $43 per ton to my current $124 per ton.
    in the last 60 days we had a $22 per ton increase on trucking.

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  2. escobarmj

    escobarmj Member

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    RI
    I bet alot of heat from my oil boiler is wasted heating the air and foundation in my basement.
  3. tmiraglia

    tmiraglia New Member

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    Who knows if that's $3 oil he's saving or not. After he burns 150 gallons, it well could be $4 oil a month from now. Even at $3 oil and $300 pellets, pellets are still about 20 percent cheaper per BTU. And as several people pointed out, the direct-heat of the stove can be more efficient. I think this time of year, I'm burning just a few pounds of pellets a day taking the chill off the main living space morning and evening. I don't think I could fire up the furnace that efficiently. I think the real trend here and opportunity for longer term savings is that people may be moving back toward space heating rather than central heating. Central heating was a luxury to keep your whole house at 72 degrees! And even compared to zoned heating, people may now be learning to keep warm with 40kBTU heaters rather than 100kBTU furnaces. The price per BTU is a great start for comparison, but personal experience and comfort rules!
  4. johnchap

    johnchap Member

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    North Central CT and Southern VT
    lots to digest

    solar ? I had a complete estimate from an unnamed company - even with CT rebate stuff I would have shelled out 22,000 to save a few pennies - the company guy even said by the time you reap the benefits you will be over 65 (now 50) so I declined politely ( my house was almost ideal for generating and even better now with some recent tree removals)

    pellets verse oil .... despite my 3 stoves I will go the cheapest road -
    I bought my pellets in spring for 180 a ton - had a restraining order against my oil company (could be lifted if price goes down)

    I love the pellet or wood heat method .... but the price hikes are not indicative of fair play - it is not costing the manufacturers or truckers a hundred dollars or even 75 dollars extra a ton to make and deliver that's just insane - even with gas prices going high (now very low) it does not reflect honest business practices - ethics are going south in pellet business as they went south years ago in the oil/gas bus
  5. JustWood

    JustWood Minister of Fire

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  6. Xena

    Xena Minister of Fire

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    And you are certain of that because?


    Read post #25 in case you missed it.
  7. DiggerJim

    DiggerJim Feeling the Heat

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    I don't know how he knows, but I am 18 miles from my pellet guy. It's $30/ton to deliver. That's $90 to drive 36 miles. My diesel pikup gets 12 mpg which is 3 gallons or $15 (hand grenade math here). At $1mi (including truck depreciation, etc I assume), he's still keeping nearly $60 for a driver to spend an hour to deliver my pellets. If he aligns his deliveries by location, then he'll spend even less time/delivery.

    A dealer who has costs of 75 or $100 a ton to deliver is not doing it because it's costing him an extra 75 or 100 to deliver (as the previous poster suggested) - it's either bad management or extra profitability.

    On the flip side, if someone is willing to pay 75 or 100 per ton to get it delivered, then it's a fair price. If there are no customers at that price, what it costs him is irrelevant - he won't sell any. As for my dealer, I picked them up myself this year but will pay him to deliver next year (unless he jacks the $30/ton delivery charge to something I don't like) cause it's worth the $90 so I don't have to drive there and unload them by hand.
  8. strangemainer

    strangemainer New Member

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    It is almost cheaper for me to burn oil. ALMOST. Since I paid $225 a ton I'll burn the wood.
    Heating oil will no doubt go back up. I'll sit on my "cheap" oil.
    I hate the roller coaster, but the got us my the short and curlys!
  9. hearthtools

    hearthtools Moderator Emeritus

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    [/quote]

    im not talking about Delivery to your home
    we deliver and HAND STACK
    and charge $50 for one ton
    55 for 2
    75 for 3
    85 for 4 AND SO ON

    BUT THE DEALER YOU ARE TALKING ABOUT IS NOT MAKING A KILLING IF HIS TRUCK AS A LARGE TRUCK THAT THE DRIVER IS REQUIRED TO HAVE A COMMERCIAL LICIENCE HE IS PAYING THAT GUY much more that minimum wage. and paying for a $100,000 truck and fork lift.
    and paying for the LAND he keeps your pellets IN STOCK for you to have in a moments notice.



    Im talking about BIG RIG TRUCKING from the pellet mill to your dealer
    big rigs gets an average of 6 MPG
    The truck and trailer cost more than some homes
    INSURANCE IS NOT CHEEP
    and down time
  10. johnchap

    johnchap Member

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    North Central CT and Southern VT
    I'm not talking about Delivery to your home
    we deliver and HAND STACK
    and charge $50 for one ton
    55 for 2
    75 for 3
    85 for 4 AND SO ON

    BUT THE DEALER YOU ARE TALKING ABOUT IS NOT MAKING A KILLING IF HIS TRUCK AS A LARGE TRUCK THAT THE DRIVER IS REQUIRED TO HAVE A COMMERCIAL LICIENCE HE IS PAYING THAT GUY much more that minimum wage. and paying for a $100,000 truck and fork lift.
    and paying for the LAND he keeps your pellets IN STOCK for you to have in a moments notice.



    Im talking about BIG RIG TRUCKING from the pellet mill to your dealer
    big rigs gets an average of 6 MPG
    The truck and trailer cost more than some homes
    INSURANCE IS NOT CHEEP
    and down time[/quote]


    all well put
    my dealer does not need to hand stack anything, he does not need to deliver anything to me, he puts pellets in an area the size of two football fields that used to be used for NOTHING. I like him and the family but reality is what reality is. I go pickup my pellets and it may cost me about 6 more bucks to do p/u verse last year ...all total.The truckers and the company would have to pay license fees and insurance no matter what so that case is mute. I looked at the gas diesel thing - to take my f250 to VT and back cost me about 19 dollars more (MAX) this year verse last --- the land thing ... most dealers that are around here have PLENTY of space to store which would be empty if not for the pellets
    hey I am not trying to down anyone who wants to make cash - all good there but ethics and that moral compass I referenced is still a bit bent. my opinion and not meant to cause insult. Peace Pause and Paws
  11. JustWood

    JustWood Minister of Fire

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    all well put
    my dealer does not need to hand stack anything, he does not need to deliver anything to me, he puts pellets in an area the size of two football fields that used to be used for NOTHING. I like him and the family but reality is what reality is. I go pickup my pellets and it may cost me about 6 more bucks to do p/u verse last year ...all total.The truckers and the company would have to pay license fees and insurance no matter what so that case is mute. I looked at the gas diesel thing - to take my f250 to VT and back cost me about 19 dollars more (MAX) this year verse last --- the land thing ... most dealers that are around here have PLENTY of space to store which would be empty if not for the pellets
    hey I am not trying to down anyone who wants to make cash - all good there but ethics and that moral compass I referenced is still a bit bent. my opinion and not meant to cause insult. Peace Pause and Paws[/quote]

    So what your saying is that since truckers have to pay licenses and insurance anyway and pellet distributors aren't using the land for anything else thet they should provide their services for FREE or at a discount price. SORRY DUDE but I don't get out of bed in the morning for free or a discount!
    I think that since YOU have to have a vehicle to go get groceries, run errands and shuttle your kids around that you should take a pay cut or work for free since you have to have licenses and insurance and a vehicle anyway.
  12. in-control

    in-control New Member

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    Loc:
    Central Ma
    im not talking about Delivery to your home
    we deliver and HAND STACK
    and charge $50 for one ton
    55 for 2
    75 for 3
    85 for 4 AND SO ON



    BUT THE DEALER YOU ARE TALKING ABOUT IS NOT MAKING A KILLING IF HIS TRUCK AS A LARGE TRUCK THAT THE DRIVER IS REQUIRED TO HAVE A COMMERCIAL LICIENCE HE IS PAYING THAT GUY much more that minimum wage. and paying for a $100,000 truck and fork lift.
    and paying for the LAND he keeps your pellets IN STOCK for you to have in a moments notice.



    Im talking about BIG RIG TRUCKING from the pellet mill to your dealer
    big rigs gets an average of 6 MPG
    The truck and trailer cost more than some homes
    INSURANCE IS NOT CHEEP
    and down time[/quote]


    Why don't you offer a bulk delivery and a storage system program. Just like Oil? I would even sign a contract, just like oil. You can use the same delivery system as oil - just pellets.
    Why re-invent the wheel! If you make the pellets - connect with an Oil company and make the arrangement everyone wins. The Oil companies in New England are loosing alot of business because they don't offer alternate solutions. Most people are going to pellet or wood stoves and the oil companies stopped giving out contracts, forcing everyone to a cash and carry program. All those years of building a good customer base are now gone. I have a friend who owns a oil delivery company and he is most likely going out of business as his costs are increasing and the customers are simply calling around and finding the cheapest oil when their tank gets low. Image if he could offer another solution. He keeps the customers and you get the benifit. Capitialism is still alive!! BTY PelletSales.com is starting to offer this.

    Just my two cents.
  13. JustWood

    JustWood Minister of Fire

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    Just so you guys know what it costs to run a truck I'll give you a run down of my costs PER YEAR PER TRUCK/TRAILER.
    Todays replacement cost of ONE truck and trailer $230,000.00 . New class 8 commercial vehicles in NYS (12% FET & 7.75% state) have a sales tax rate of 19.75%!!!!!!! As well as new tires.
    Insurance $3271/year Liability/comp the whole works. Law requires a minimum of $1,000,000 coverage to drive down the road.
    Registration is based on mileage. I curently run around 25,000 miles/year/truck and my plates cost is $1298/year.
    Heavy Highway Use Permit $550/year
    NYS Indivisible Overweight Permit $360/ year
    NYS Road Use Permit $39/year
    Quarterly road tax, depends on mileage but usually averages $600/year
    Yearly physicals and drug testing $600/year/driver.
    Set of new tires every 30,000 miles $3800/year
    My wages. I REFUSE to work for less than $35,000/year especially with all the overtime I work and BS I put up with.
    Like Rod says these trucks don't get very good mileage. Last quarterly report mine averaged 5.7 MPG so you can figure close to $1/mile for fuel.$25,000/year.
    My shop cost aroound $80,000 to build and contains around $20,000 in tools. A necessity with local wrench rates at $105/hour.
    State DOT Motor Carrier Enforcement. I'm usually forced to "donate" $500- $1000/ year to them for BS reasons like touching air lines, broken lights,loose bolts,etc.
    Oil ,fuel, and air filter changes run around $650/year.
    Brakes are around $400/year
    Parts- Don't have a clue what this figure is/year but I just bought a starter for one of my trucks. OEM was $1150. Parts are not cheap.
    These are some but not all of the expenses trucking companies pay to get a product to the consumer.

    You guys seem to forget that these pellets take a ride 4 times on 4 trucks before they get to your house. Logs from woods to mill, sawdust from mill to pellet mfg, pellet mfg to dealer, and dealer to your house.Lets not forget the pickup trucks, chainsaws, log skidders, forklifts, and loaders involved in the process also. I'm very curious to know how many gallons of diesel,gasoline,cu.ft. of ntural gas(for drying) and tons of coal(for electric) are needed to produce a ton of pellets, aren't you?
  14. hearthtools

    hearthtools Moderator Emeritus

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    All I have to say is I am currently selling pellets for $325 per ton
    I make $30 per ton before My overhead cost to store and handle them and losses due to damage.
    this is Extremely low Margin. but I do it as a service to my customers.

    when I have 30 ton sitting in my yard waiting to be picked up that is a lot of cash out of my pocket that I could use for other things.
    with very little profit.
  15. strangemainer

    strangemainer New Member

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    It just sucks when you hear of people in the Midwest paying under $200 and in New England its over $300
    guess its the "quality of living" ???????????
  16. hearthtools

    hearthtools Moderator Emeritus

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    Could be the distance from the Supplier to your dealer
    because shipping dictates the final price.
    All pellet mills sell the pellet at about the same price +/- $15 per ton
  17. DiggerJim

    DiggerJim Feeling the Heat

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    Northcentral Connecticut
    Yeah, I'm over 40 miles from the nearest pellet mill. There seems to be less than a dozen within 100 miles. Heck, NEWP is 110 miles away! It takes 2 maybe 2 1/2 hours to drive that far. Whew! That kind of distance really adds up I guess ;-)
  18. hearthtools

    hearthtools Moderator Emeritus

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    Im not sure what is going on on the EAST coast.
    My pellets are trucked over 1300 miles to get to me.
    People say the west coast is high priced
    but looking at what people are charging labor to install stoves on the east cost
    I seen on this board installers charging about $200 more that we do for labor to install a stove.
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