Synthetic Base Oil Prices Up

[MolaKule]

Notices were sent to blenders and formulators the other day from a major supplier stating that PAO's in 25, 40, and 100 cSt would go up 20 cents a pound over current prices.

That's 20 cents a pound folks, not 20 cents a gallon.

So why is this so important?

These weights are used as starting components for blending synthetic motor oils and gear lubes.

And shipping for a barrel of oil now costs approx. $429.

So before you complain about costs of lubes and shippping from Internet companies, just remember they are really getting squeezed here. Internet companies SHOW you the costs of shipping "up-front" and don't hide it in the final retail price of the product.

 

[Shannow]

so what's that, around 40c US per quart/litre ?

just for the basestock.

 

[Pablo]

I don't think Amsoil hides their prices.......every one is getting squeezed here.

Amsoil shipping is fairly low. And their price increases have been fairly modest......but still cost increases will appear in all oil prices, too.

 

[pitzel]

Molakule, $429 to ship a barrel of oil is $7.80/gallon. Just how are you quoting shipping, air freight or something?

Just how is it that I can buy Rotella or many other fine oils off the shelf for just slightly more than that?

 

[bulwnkl]

quote:

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Originally posted by pitzel:
Just how is it that I can buy Rotella or many other fine oils off the shelf for just slightly more than that?

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I think that's an excellent example of how costs scale with volume. It's MUCH cheaper per unit to ship an entire truck, train, ocean vessel, or whatever than to ship one drum of oil on that vessel. And even cheaper than that if you fill a fleet of the vehicles with your product.

Still, $7.80 per gallon is awfully high. Perhaps another shipper...

 

[MolaKule]

Shipping is by weight, and many of the fluids and additives are very dense, very heavy.

Nope, whether is be Yellow Freight, DHL, Estes, CFI, etc., it is still around $429/525 lbs for Ground via semi.

Shipping averages 53% of cost of base fluids and additives.

The 10.7% fuel charge doesn't help either.

 

[buster]

That sux. Blenders will have to cut corner's somewhere. No way around this one it looks like.

 

[oilyriser]

That's more than the cost of motor oil in qt bottles. Maybe those are actually sold in stores below cost.

 

[n8wvi]

quote:

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Originally posted by oilyriser:
That's more than the cost of motor oil in qt bottles. Maybe those are actually sold in stores below cost.

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Wouldn't surprise me much. In the late 80's I worked in a garage for a major retailer and saw the cost sheets. A qt or Pennzoil cost our store 99 cents, we sold it for 97.

Dave

 

[ericgl]

quote:

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Originally posted by MolaKule:
Shipping is by weight, and many of the fluids and additives are very dense, very heavy.

Nope, whether is be Yellow Freight, DHL, Estes, CFI, etc., it is still around $429/525 lbs for Ground via semi.

Shipping averages 53% of cost of base fluids and additives.

The 10.7% fuel charge doesn't help either.

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An issue we have when shipping lubricants is the 1000 lb minimum. We can basically ship 2 drums at the same cost as one.
Also, FWIW, we ship enough to have been able to negotiate a 65% discount from posted rates. You might want want to check with your suppliers to see if they can help you out.

 

[haley10]

quote:

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Originally posted by MolaKule:
Shipping is by weight, and many of the fluids and additives are very dense, very heavy.

Nope, whether is be Yellow Freight, DHL, Estes, CFI, etc., it is still around $429/525 lbs for Ground via semi.

Shipping averages 53% of cost of base fluids and additives.

The 10.7% fuel charge doesn't help either.

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Shipping by Yellow Freight and some of the other big boys is risky. They frequently destroy your load and it takes forever to collect the insurance.

I think you could negotiate something much lower cost with a good independent mom and pop operation and your product will get a little more TLC to boot.