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

[hearthtools]

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.

 

[escobarmj]

I have two 330 gal tanks in the basement that are currently full. Topped off a few different times at an average of about $390/gal. I'll be burning my pellets and saving that $4 oil.

You're not saving $4 oil, you're saving $3 oil since that's what it costs to replace it. The stuff in your tank isn't worth $4 anymore. The difference in what you paid has already disappeared on you.

Since the replacement cost of oil is less than the replacement cost of your pellets, economically you're better off burning the oil and saving the pellets. Situation may change over time but the sunk cost of what you've already bought has nothing to do with which is cheaper to use right now.

(If you had bought the oil at $1/gal would you think you should burn it even though replacing it costs 3 times as much?)

Yes, I read your reply a few times and have to agree, i didn't think about it that way. But, i'm not sure about "Since the replacement cost of oil is less than the replacement cost of your pellets." That's not true (I'm in CT)--I'd use a good 600 gallons this winter and that's 'approx' $1800. The 3 tons of pellets I just bought were $900. Even if I need and get a 4th ton, that's still cheaper than heating with oil.

EDIT - After I replied here I went to a fuel calculator and actually at $3 gal oil and $300 ton Pellets there's not much difference in the cost per million BTU's. Ah, whatever, I'll burn the pellets and use the oil for the hot water & heat the pipes while we're not home.

Thanks there DiggerJim for the input!

Of course the saving with pellets at a compared to oil is usually that the BTU`s produced from pellets are distributed directly in the actual living space and not wasted in the sleeping quarters.
The bottom line is that there can be a significant savings and that`s what is important to some folks.

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

 

[tmiraglia]

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!

 

[johnchap]

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

 

[JustWood]

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[/quote

]



Think again! Fuel costs alone are $1/mile round trip. Divide that by 24 ton.

 

[Xena]

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....

And you are certain of that because?


Read post #25 in case you missed it.

 

[DiggerJim]

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....

And you are certain of that because?


Read post #25 in case you missed it.

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.

 

[strangemainer]

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!

 

[hearthtools]

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.

[/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

 

[johnchap]

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.

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

 

[JustWood]

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.

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

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.

 

[in-control]

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.

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.

 

[JustWood]

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?

 

[hearthtools]

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.

 

[strangemainer]

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" ???????????

 

[hearthtools]

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" ???????????

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

 

[DiggerJim]

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

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 ;-)

 

[hearthtools]

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.