Responding to last week’s post [You want fries with that?], a reader pointed out that the memberships have gone up in the past few years, to which I say “yeah, a little.” Maybe the guys up in corporate are reading my blog? I’ve only been harping on this topic for since 2007. To be sure, the membership networks have raised their fees, but has it been enough?
Here is a quick chart I created so you can get a visual comparison of what I’m talking about. There are four lines on the chart, representing the following:
- An average unlimited type of memberships from 1995 to 2011. I averaged the 3 big three newtorks (Boat/US, SeaTow and Vessel Assist). I know, VAAA is part of BUS, but only recently, and the two products have not always been the same price. Hey, it’s an average, ok?
- The value of $100 in 1995 to 2011, adjusted for inflation as tracked by the CPI.
- The average non-member daytime hourly towing rate, culled mostly from my own records and memory.
- The national average cost of 100 gallons of gasoline at the pump (street prices, not fuel docks). I used 100 gallons only to force the graph to compare these four items within a useful dollar range. Otherwise, the gas price line would be a tiny spec at the bottom of the chart. I used gasoline for simplicity. The trend is the same for diesel.
“Foul!” you cry, pointing out that the CPI already includes the price of fuel. But, not in the ratios that apply to our business; the CPI is weighted for an average American household, not a marine towing business. Fuel is one of the biggest hourly cost of running a towboat, second only to the captain’s wages. When the price of fuel goes up it drives your hourly profits down dollar for dollar, and so I think separating it out on the chart gives a better comparison.
The red line on the chart puts it in perspective, eh? One can see that the membership fees have just barely kept up with the overall CPI, but are sorely behind the rise in gasoline prices. Membership price is not the same as hourly income at the local level, but who can argue that one isn’t related to the other.
Another interesting trend is that membership rates haven’t even kept up with the rise in non-member rates. ‘Sup with that? Since 1995, the non member rates have essentially doubled, from around $150/hr to almost $300/hr.
