Invacare raises shipping fees

Sunday, August 21, 2005

ELYRIA, Ohio -- Invacare is raising its free freight threshold from $1,000 to $1,500 and implementing a 1% fuel surcharge on all shipments as the company seeks to combat record fuel costs nationwide.

"Our fuel costs have gone up 32% since Jan. 1 and 15% since May 1," said Invacare senior vice president of worldwide market development, Lou Slangen. "After we [raise the fees], Invacare is still paying more than three-quarters of the freight bill out there."

Invacare spent about $60 million on freight in its HME division in the past year, a doubling of cost over the level two years ago.

"We're now at the point of trying to stabilize that without having a different order pattern from the provider," said Slangen.

For orders less than $1,500, Invacare charges a 4% shipping fee.

Invacare, obviously, is not alone in its battle against rising fuel costs. A number of manufacturers did not return calls for this article. Others -- Pride Mobility and Medline -- say they've already responded to rising fuel costs and that so far, there are no plans to raise freight charges.

"A year ago, in Sept. 2004, we updated our freight policy," said Kirsten DeLay, senior vice president of sales management and operational planning at Pride. "Our freight policy revolves around quantity by product category, not dollar volume."

DeLay couldn't say by what percent that policy revision increased freight costs to customers. She said the company's freight partners have agreed to keep freight costs as-is as long as the order volume continues at current levels.

At Medline, the company still offers free freight at the $750 threshold. In response to rising costs, Medline is expanding its warehouse base "so we keep getting closer to the customer," said Tom Tucker, vice president of sales for DME and respiratory.

Medline also launched a scheduled shipping program whereby deliveries are made to the customer on the same day every week.

Invacare forecasted plans to boost shipping fees for customers in late July when the company turned in its quarterly financial report. Weeks before the report, Invacare told Wall Street that a number of unforeseen developments, including the high price of fuel, would cause the company to miss its earnings projections. The company's stock fell from about $45 to the upper thirties where it's been stalled since.