How do I price a gas delivery route instead of individual drops?

Set a minimum delivery charge that covers a single truck roll, then price incremental cylinders down as drop size grows so large routed stops pay less per cylinder than one-off drops. Add a defined delivery zone map so distance is a tier rather than a guess, and index a fuel surcharge as its own line. A customer taking 20 cylinders on a scheduled stop should never pay the same per-cylinder delivery rate as an emergency single-cylinder run.

What is cylinder demurrage and how much should I charge?

Demurrage is a daily charge that starts after a customer holds a cylinder past a free period, commonly 30 days. It exists to make holding your cylinders more expensive than returning them, so your capital-intensive fleet turns instead of sitting idle. Rates are set per cylinder per day and should be high enough to drive returns. Combined with monthly rental, demurrage is the most under-collected revenue in gas distribution and the difference between a fleet that pays for itself and one you keep re-buying.

Do I need FDA lot tracking for medical gases?

Yes. Medical oxygen and other medical-grade gases are FDA-regulated drug products that require lot and fill traceability, meaning you record the lot number, fill, and customer for every medical cylinder and can reconstruct the chain if there is a recall or quality question. This recordkeeping is not optional, and the labor to maintain it, plus keeping medical product segregated from industrial, belongs in your cost model and your pricing.

Why should I charge cylinder rental if I already mark up the gas?

Because a high-pressure cylinder is a several-hundred-dollar asset you own and the customer merely borrows. If you only charge for the gas, that cylinder is a free loan sitting on the customer's site, often for months. Monthly rental (commonly $8 to $25 per high-pressure cylinder) plus enforced demurrage is recurring, high-margin revenue that most distributors undercharge. Tracking which serial numbers are on which site is what lets you actually collect it and stop losing cylinders to disputes.

How to Price Medical & Industrial Gas Delivery Routes

Q: How often do gas cylinders need DOT requalification?

High-pressure cylinders are DOT-regulated pressure vessels that require hydrostatic requalification on a cycle that is commonly every 5 or 10 years depending on the cylinder type and specification. Filling or transporting a cylinder past its requalification date is a violation. Track requalification due dates across your fleet with flags so testing is scheduled and budgeted rather than discovered when a whole batch ages out at once and hits you as an unplanned capital cost.

# How to Price Medical & Industrial Gas Delivery Routes

The gas distribution business looks simple from the outside: fill cylinders, drive them to customers, collect empties. The margin, though, does not live in the gas. It lives in how you price the route, how you manage the cylinder fleet as a rented asset, and how tightly you track demurrage. Distributors who only charge for the molecules leave most of their profit on the truck. This guide covers how to price the delivery and rental side of the business while keeping the FDA and DOT records that make medical gas a defensible trade rather than a liability.

The Three Things You Are Actually Charging For

Every gas distribution invoice bundles three separate revenue streams, and pricing each one deliberately is the whole game:

1. The gas itself — oxygen, nitrogen, argon, CO2, acetylene, welding mixes, or medical-grade product, priced per cubic foot or per unit at a markup over your fill cost. 2. Cylinder rental — a monthly or annual charge for keeping the distributor's asset on the customer's site. This is recurring, high-margin, and the most under-collected line in the industry. 3. Delivery — the cost of getting the cylinder there, priced by route, drop size, and distance.

On top of those sits demurrage, the daily charge that kicks in when a customer holds a cylinder past its free period. Demurrage is not a penalty you apologize for; it is how you get your capital-intensive cylinder fleet to turn instead of sitting idle in a customer's back room for eight months.

Price the Route, Not Just the Drop

A single cylinder delivered 30 miles out is not the same job as ten cylinders on a routed stop. New distributors price every drop as if it were standalone and either lose money on small orders or scare off large accounts with flat pricing.

Build delivery pricing around the route. Set a minimum delivery charge that covers a truck roll, then price incremental cylinders down as drop size grows. A customer taking 20 cylinders on a scheduled route stop should pay less per cylinder in delivery than a one-off emergency drop. Layer in a delivery zone map so distance is a defined tier, not a guess, and add a fuel surcharge line you can index rather than eat.

Ballpark anchors, which vary widely by region and product:

Minimum delivery / trip charge: $25 to $75 per stop.
Hazmat / hazardous materials fee: a flat per-invoice line, often $8 to $20.
Emergency or after-hours delivery: 1.5x to 2x standard, plus a premium trip charge.
Cylinder rental: commonly $8 to $25 per cylinder per month for high-pressure cylinders, more for specialty or cryogenic vessels.
Demurrage: a daily rate that starts after a free period (often 30 days), designed to make holding cylinders more expensive than returning them.

Cylinder Rental and Demurrage Are Where the Money Hides

A high-pressure cylinder is a several-hundred-dollar asset that you own and the customer borrows. If you are not charging monthly rental and enforcing demurrage, that asset is a free loan. The distributors who thrive treat the cylinder fleet like a rental fleet: every cylinder has an owner, a location, a customer, and a balance.

That requires knowing where every cylinder is. When a customer says they returned twenty and your records show fifteen, the difference is real money in lost assets and uncollected rental. A cylinder asset tracker that shows which serial numbers are on which customer site, how long they have been out, and what rental and demurrage balance has accrued turns fuzzy disputes into a clean invoice you can defend.

The Medical & Industrial Gas Distribution Ops Kit is built around this. It pairs a route delivery pricing model by gas type, cylinder size, and demurrage with a customer cylinder asset and rental balance tracker, so the two revenue streams distributors usually undercharge become explicit lines you actually collect.

Medical Gas Adds a Traceability Layer You Cannot Skip

If any of your product is medical grade, you are not just a distributor; you are handling an FDA-regulated drug. Medical oxygen and other medical gases require lot and fill traceability so any batch can be traced through the supply chain. That means recording the lot number, the fill, and the customer for every medical cylinder, and being able to reconstruct the chain if there is ever a recall or a quality question.

This is not optional recordkeeping; it is the difference between a defensible business and a shutdown. Price it in. The labor to maintain lot and fill records, the segregation of medical from industrial product, and the compliance overhead all belong in your cost model. A medical-gas lot, fill, and traceability log that ties each filled cylinder to its lot and customer is the record an FDA inspector expects to see, and it protects you if a customer ever questions product quality.

Do Not Let DOT Requalification Sneak Up

Every high-pressure cylinder in your fleet is a DOT-regulated pressure vessel with a hydrostatic requalification cycle (commonly every 5 or 10 years depending on cylinder type and specification). Filling or transporting a cylinder past its requalification date is a violation, and a fleet that ages out unnoticed is both a compliance problem and an unplanned capital hit when a batch of cylinders all need testing at once.

Build requalification into your fleet register with due-date flags so testing is scheduled and budgeted, not discovered when a driver refuses to fill an out-of-date cylinder. The same discipline applies to your drivers: HAZMAT endorsements, CDL status, and DOT hours all need tracking, because a lapsed driver credential stops the whole route.

Common Pricing Mistakes

Charging for gas, giving away rental. The cylinder is an asset on loan; charge monthly rental on every one.
Not enforcing demurrage. Without it, customers hoard your fleet and you buy cylinders you already own.
Flat per-cylinder delivery pricing. It punishes big accounts and loses money on small ones; price by route and drop size.
Losing cylinder location. Untracked cylinders are lost assets and uncollected balances; know where every serial number is.
Under-costing medical compliance. Lot traceability and product segregation carry real labor that belongs in the price.
Ignoring requalification timing. A fleet that ages out all at once is a capital shock you should have scheduled.

Build the System Once

Gas distribution rewards operators who treat the cylinder fleet as a managed rental asset and the route as the product, not the afterthought. Get the three revenue streams onto separate lines, enforce demurrage, keep the FDA and DOT records tight, and the margin that most distributors leave on the truck stays with you. Our free starter guide walks through setting your first delivery zones and rental rates, and the Medical & Industrial Gas Distribution Ops Kit gives you the fleet register with requalification flags, the FDA lot log, the route pricing model, the customer cylinder and demurrage tracker, and the driver credential log in one workbook so you can run it without building the system from scratch.