Saipan Ice still keeping the lid on prices

Saipan Ice, which claims to be the leading bottled water company enjoying a 60-percent market share on Saipan, disclosed the possibility that it might adjust the price of its product if cost-cutting measures fail to stem the impact of rising fuel prices.

Saipan Ice vice president Ador Songcuan stressed, however, that the company has been implementing belt-tightening measures to cushion the impact of higher fuel costs and prevent a price increase.

“As much as possible, we don’t want to raise prices,” Songcuan said. “At this time, we have no plan to raise prices yet.”

The regular delivery price of five-gallon bottled water remains at $2.50, according to Songcuan, while wholesale price to retailers remains at $2. Retailers sell the product also at $2.50.

At the current rate, Songcuan said the price is still lower than $3, the price at which Saipan Ice used to sell five-gallon bottled water before strong competition forced prices down.

Songcuan disclosed that the series of fuel price increases prompted him to meet with the company’s supervisors Wednesday to discuss measures to recover additional operational cost resulting from higher fuel and freight costs without increasing bottled water’s prices.

“Fuel price increases are impacting us substantially,” Songcuan said.

He said the company has already reduced its employees’ workhours from 48 hours to 42 hours. Saipan Ice also reduced the number of delivery trucks in operation from 20 to 16 and developed a route plan for delivery trucks.

Songcuan said monthly fuel cost on delivery trucks alone increased from $5,200 some months ago to about $8,000. In July, he said the fuel cost spent for deliveries reached $8,300.

Shipping costs also increased, with ocean freight from Korea rising from $1,400 to $1,800, he said. Freight cost for a 40-footer container van originating from California increased from $3,000 to $3,600, he added.

Earlier this week, Mobil and Shell gas stations implemented a new round of fuel price increases by up to 7 cents a gallon.

At full-serve rate, Mobil gas stations in the Northern Marianas now retail super gasoline at $2.959 per gallon; unleaded gasoline, $$2.859 per gallon; and diesel, $2.849 a gallon. Self-serve rates are slightly lower at $2.759, $2.649, and $2.759, respectively.

Shell gas stations on Saipan now retail premium and regular gasoline at $2.869 and $2.779 at full-serve rate; self-serve rates are $2.769 and $2.669, respectively, while the price of diesel is now $2.849 per gallon.