High input costs still dog industry - The Packer

High input costs still dog industry

03/31/2010 11:21:56 AM
Andy Nelson

CHELSEA, Mass. — The high cost of freight, health insurance and other inputs continue to dog wholesalers on Boston’s two terminal markets, though many fuel prices aren’t the scourge they were in the not too distant past.

Transportation costs aren’t weighing as heavily on wholesalers like Coosemans Boston Inc., Chelsea, said Maurice Crafts, a salesman for the company.

“A few years ago we were talking a lot about fuel costs and availability, but now they’ve settled down,” he said.

There’s no question that things are better than a few years ago, when stratospheric fuel costs took a toll on the transportation industry, said Yanni Alphas, president and chief executive officer of Chelsea-based The Alphas Co.

“We lost a lot of carriers when fuel went crazy,” he said.

Now there are plenty of carriers, he said. But while fuel prices haven’t returned to their formerly high levels, they are up this year, he said, and the industry is feeling it.

“Availability is no problem, it’s just paying them,” Alphas said.

Fuel costs have gotten deceptively high again, said Sam Rocco, president of BC Produce Inc.

“They’ve doubled since they bottomed out two years ago,” he said. “They’re creeping up.”

Truck availability, though, hasn’t been an issue, Rocco said.

Fuel isn’t the only input cost that’s increasing, he said. Electricity, health care and other inputs continue to place a heavy burden on distributors.

“Everything’s going up,” he said.

Even if Congress does manage to move mountains and pass health care reform, it wouldn’t likely lower health care costs for Massachusetts businesses, Rocco said.

That’s because Massachusetts already passed comprehensive health care reform on the state level under Gov. Mitt Romney. And that change didn’t affect costs significantly, Rocco said. 

Fluctuations in fuel prices don’t have much of an effect on the day-to-day business of Lisitano Produce Inc., Chelsea, said Frank Lisitano, president. Higher costs are just added to the price of the product.

“It doesn’t make too much of a difference,” he said.

Truck availability also hasn’t been a problem thus far in 2010, Lisitano said.

What is a problem, though, is higher health care costs, he said.

“It’s just awful,” he said. “The way they’re allowed to raise their prices every year. We can’t raise our prices every year. But no one’s telling them they can’t do it, so they just do it.”

Steven Piazza, a salesman for Everett-based Community-Suffolk Inc., agreed.

“Our health care costs are already astronomical, and now they’re talking about another 30% hike,” he said.

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