June 15, 2004 -- Effective with shipments on June 21st, International Paper will include a fuel surcharge fee on all invoices. We have been absorbing this surcharge since the beginning of the year, but faced with a forecast for even higher fuel costs, we have decided to begin charging a fuel surcharge fee on all shipments from our facilities. The amount of the fee will be based solely on the additional surcharges that we incur and our intention is to make the process as transparent as possible. The specifics are as follows:
· The fuel surcharge fee will be implemented and visible on invoices beginning with shipments of June 21st, 2004.
· The fees to recover the additional fuel costs will appear as separate line items on your invoices as a fuel surcharge and, if applicable, a warehouse charge.
· The fuel surcharge is a flat rate per mile to your shipping location from the IP facility or warehouse that shipped your order.
· The fee for truck and trailer-on -flatcar shipments is calculated each week based on the national average price for diesel fuel as determined by the Department of Energy (http://tonto.eia.doe.gov/oog/info/gdu/gasdiesel.asp).
· The fee for boxcar shipments is based on the price of West Texas Intermediate Crude Oil as published by the Wall Street journal.
· The fees for all modes of transportation are adjusted each week based on the relevant data, and are incorporated into the rates that we pay the carriers for delivery.
· A separate fee will also be included for shipments that go through a warehouse. The rates are calculated as above based on the mill locations that serve the various warehouses and will allow us to recover the additional fuel cost incurred for shipping to the warehouse.
· All other current freight policies (including Stop Off Charges), cash terms, standard differentials, and sales policies remain unchanged.
We commit to you that the fuel surcharge fees will end when we stop receiving additional fuel surcharges. As always, you can contact your IP Sales Representative if you need additional information regarding your shipping locations. We ask for your continued support during these difficult times and we thank you for your business.
