Fuel escalator for contract services ‘can be achieved quickly’

Fuel escalator is achievable, says Portland Analytics

Introduction of a fuel escalator on contracted services to temper the impact of diesel costs is achievable easily and quickly, supplier Portland Analytics has said.

Its bid to engage with coach and bus operators in the home-to-school segment follows a call from an operator of such services for the introduction of a payment mechanism to reflect the cost of diesel. While some local authorities (LAs) have acted to mitigate the current crisis, many have not, and that operator has highlighted a risk of contracts being handed back.

Portland says that its fuel price index tool is used by over 300 members of the haulage sector. It publishes figures on a daily and monthly basis and includes a surcharge calculator that considers factors such as fuel price at the time the contract commenced and the percentage of overall operating costs that fuel represents to calculate a period-based surcharge due to the operator.

Portland Analytics Director Mike Johnson says that the tool would easily translate to home-to-school contracts. Operators and LAs can subscribe to the system, which he says is “totally transparent.” Via a standard package, the calculator also gives access to three months’ backdated fuel price data and six prior monthly reports.

Portland Analytics fuel escalator screenshot

Mr Johnson adds that a fuel escalator “works both ways” and gives LAs clarity on changes to the cost of undertaking a contract.

A further operator active in the home-to-school market has advocated the adoption of such a tool, observing that it would “help to offset the costs incurred” during the current diesel price crisis.

Data published by RHA has shown the during April the average price of bulk diesel was 143.79ppl, down less than 1% from the March average of 144.94ppl. RHA also cautioned that availability remains “extremely tight,” leading to higher margins.