Rising fuel costs forced Leroy Yegge, who owns Bruno's Pizza in South Baltimore, to reluctantly tack on a 50-cent surcharge to his delivery orders.
The trendy Ixia Restaurant in the city's Mount Vernon section is aiming to use ingredients that are not as costly to deliver as it develops its new spring menu.
And at Baltimore Blossoms Floral Boutique, owner Rachelle Bland recently raised the price of deliveries beyond her immediate area to $9.95, from $7.95.
"I tried hard to stay lower than other places for so long, hoping that gas prices would go down," she said. "But after a while, I just couldn't."
Skyrocketing fuel costs are rippling far beyond the pump. Prices for flights, cab rides, vacation cruises, even breakfast cereal have risen as gasoline has pushed well past the $2-a-gallon mark. And with summer travel demand expected to force prices higher, more surcharges could be in store for consumers and businesses.
At the Papermoon Diner, which shares its owner with Ixia, on West 29th Street in Remington, gas prices moved the diner to begin charging for items such as adding tomato to a grilled cheese sandwich, said Lauren Smith, its office manager. The restaurant posted a sign several months ago alerting customers to small increases in menu prices due to rising costs for produce delivery.
"Companies that we have been working with for a very long time have started to charge us for fuel surcharges for the first time," she said.
The average retail price for a gallon of regular gasoline is $2.15 nationally and $2.14 in Maryland, both up 40 cents from a year ago, according to AAA Mid-Atlantic.
"It's very hard to forecast prices because we don't know what OPEC will do and we don't know what will happen to the U.S. economy or in China, where a lot of demand also is coming from," said Ron Planting, an economist for the American Petroleum Institute, an industry group. "But there is strong demand and little spare production capacity. ... And historically, yes, there is an uptick in the summer here in the United States."
The rise in gas prices is affecting industries differently, he said. Fuel costs to manufacturers average 4 percent of their costs of materials, while the burden is much higher for delivery businesses. For the already strapped airlines, fuel costs are second only to labor.
Although airlines haven't officially added fuel surcharges, many have raised fares $5 or $10 in recent weeks, according to the Air Transport Association, a trade group. U.S. airlines consumed 18.7 billion gallons of jet fuel in 2004 at an average of $1.15 a gallon. That $21.4 billion tab exceeded the 2003 total by $6.2 billion, according to the U.S. Department of Transportation.
American Airlines Inc. said yesterday that it would add a surcharge on cargo of 14 cents to 16 cents a pound for domestic shipments as of next Wednesday.
Shippers, including United Parcel Service of America Inc., have had surcharges due to fuel costs since 2000. Extra charges for packages delivered by truck are 1.75 percent of the shipping costs and for those moved by air freight, 9.5 percent. The air surcharge was 11.5 percent at the end of last year, but the company capped it.
"Nobody had foreseen the dramatic increases seen since the middle of last year," said Susan Rosenberg, a spokeswoman, who added that the Atlanta-based company is using technology, maintenance and bulk purchases of fuel to help reduce the impact.
Some cruise ships have also added surcharges, such as Star Cruises. Royal Caribbean Cruises Ltd., which serves Baltimore, said it will not add a charge but rely on such things as maintenance to improve its fuel efficiency for now.
General Mills Inc. began charging stores 4.3 percent more for its cereals last year, partially to offset higher fuel costs, according to spokeswoman Marybeth Thorsgaard.
Locally, trucking firms have been hit especially hard, as profit margins directly correlate with the rise and fall of fuel costs.
"I've been in this business for 40 years and I've never seen it this bad, and it's only going to get worse," said Ty Pruitt, owner of TP Transportation in Baltimore. He projects that prices will go to $2.50 per gallon for diesel soon. Drivers who have agreed to contracts and can't raise the price to compensate for the cost of fuel end up paying out of their own pockets, he said.
The threat of fluctuating fuel costs has made it especially tough on him to find drivers willing to make hauls out to the Midwest. The drivers would have to travel through states such as Pennsylvania, where fuel is even more expensive, Pruitt said.
Local hotels have not seen much of a fallout from a decline in tourism, but area hotel managers say the true effect won't be felt until the weather gets warmer.
The Comfort Inn might not have noticed a steep decrease in patrons, but general manager Cliff Wietstruck said the airport shuttle service has become a costly endeavor.
"The biggest impact has been on the six shuttles," he said. "I've seen our gas bills go through the roof. We used to pay $4,000 to $5,000, but now we are paying $6,000 per month just for gas."
AAA reports that a vacation this summer may be more costly all around. A survey by the motor club shows that prices for lodging and dining are expected to increase an average of 5 percent this year, driven by higher fuel costs and demand from overseas, especially with the euro strong against the dollar.
"The increase is partially because demand is up in popular places such as New York, Orlando and Las Vegas from European travelers," said Amanda Knittle, a AAA Mid-Atlantic spokeswoman. "But high fuel prices are definitely a factor."
