Happy summer, everyone! It’s hard to believe we have a half a year behind us already. As I write this article, the topic on everyone’s mind is fuel cost. A barrel of oil just hit a new high at $137.00 per barrel and the average price of a gallon of diesel in the Midwest is now running at about $4.618 per gallon. Last year at this time, it was $2.78 per gallon. That’s a 69% increase!

Diesel is more expensive than gasoline, which is interesting due to the fact that it costs less to refine diesel. One of the main factors that keeps diesel so expensive is that each 42-gallon barrel (I thought they were 55) of crude oil only yields about 7.8 gallons of diesel. Because of the global tightness and the weak dollar, diesel refineries are finding it is more profitable to export the fuel to places such as Europe, Asia and South America; rather than keep it here. These two factors, in conjunction with several others, are to blame for the spike in the cost of diesel and gasoline.

Here at JA Frate, we are holding our fuel surcharge and will continue to do so as long as it is economically possible. We have instituted a number of procedures to allow us to do this, which are described in detail on the back side. The current fuel surcharge for PAD II Midwest is $4.618 per gallon, which translates to about a 35.9% surcharge per our matrix. We will continue to try and hold our fuel surcharge at 29.9%, saving you and your customers’ money during these economically challenging times. We value your business and will continue to work hard to earn it.

Sincerely,

Joseph M. Alger
President

Hats Off To You!

JA would like to extend a sincere thank you to you, our loyal customers. It is through your continued business and support that we are still running strong. JA has stood the test of time and will continue to stand the test of time, thanks to you!

Despite the economic crunch upon us, JA has continued to remain busy with a higher than usual number of daily shipments. We continue to add new customers, many of which have been referrals. According to the callers, our reputation has preceded us…again, thanks to you! We are happy to have served you in the past and we look forward to continuing to satisfy your logistics needs in the future.

Show 'N Shine Employee Car & Motorcycle Show

On June 7th, JA had a "Show and Shine" for all employees to bring and show off their cars and motorcycles! It was a chance for all employees to join together, share laughs and to have a good time. The weather held off long enough for all the vehicles to be voted on and for all the food to be eaten! Everyone was able to relax and enjoy each other's company.

There were several awards to recognize the hard work that is put into each of these vehicles. The categories included: Best of Show, Best Vintage Car (Pre-1980), Best Muscle Car, Best Motorcycle, Best Paint Job and Kids' Choice. All winners were announced and awards were handed out at the end of the day. Thanks to everyone who participated!

It's Half Way Over - Where Did The Time Go?!?!?

That's right - it's already June! The half way point of 2008 is upon us. The summer months are here and it’s showing outside...finally! It was a long winter with a lot of weather battles. Nevertheless, we have all made it through!

JA Frate, Logistics and Transportation Services have been involved in a number of things this year. Centegra Health Care came in and conducted a Health Fair for all employees and their families. In combination with this, we have started an in house contest mirrored after the show "The Biggest Loser". Everyone has been working very hard toward a healthier year.

We were also involved in highway clean up. JA is in charge of cleaning up a large portion of Rakow Road in Crystal Lake / Lake in the Hills. This was done in May and several employees participated. We’re doing our part to keep our roads clean.

Please remember to be safe in all your summer plans!

Trouble at the Pump?

JA Frate has made several changes to control our fuel costs. Managers, Operations, Maintenance, Sales and our Quality Teams have all joined together to brainstorm some ways to save on fuel.

Our maintenance team has been working very hard and has made several changes to help out. All trucks have been programmed to not exceed speeds of 65 miles per hour. The RPM's have also been turned down on the shifting side which forces the driver to shift the vehicle at the best possible time in order to save fuel. Engine manufacturers call this "progressive shifting": the higher RPM's are being used at the top end of the transmission. In addition, once the truck has been idle for 10 minutes, the truck automatically shuts off to conserve fuel. On average, a truck will burn approximately one gallon per hour at an idle. But wait - there's more! Our maintenance manager has found a source for bio-diesel. We are currently using B11; however, there is a shortage of this fuel type. B11 stands for mixing 11% bio diesel with #2 diesel fuel. This fuel comes at less of a cost than regular diesel fuel. It also runs more efficiently, giving the trucks better fuel economy.

Though our GPS system, our operations team has been monitoring the drivers on their daily routes. Because of this technology, we can route the trucks more economically. Routing efficiently is essential to keeping the costs down. Through this same system, our operations team has also been tracking the time a truck is left idling. These times are tracked and reported company wide on a regular basis. The system can distinguish between idling times in traffic versus idling time waiting at a customer's location. All exceptions are taken into account and all drivers are held accountable for unexplained idling time.

The ultimate goal is to save the maximum amount of fuel possible; therefore putting the fuel expenditure at a minimum. The end in mind is to save on the fuel costs and pass those savings along to you. JA Frate has capped our fuel surcharge in the past and we are making steps to secure it now and in the future. Because of the steps taken, we are able to have our fuel capped at 29.9%. We will keep it as long as it is economically feasible. We appreciate all of our customers and will continue to focus on controlling our costs, which in turn will help you control your costs.