Hauliers working for Aggregate Industries (AI) have been hit with a 3% reduction in their rates after the construction materials supplier said fuel prices had plummeted.
In a letter dated 25 March, the company told hauliers that its fuel escalator mechanism would be activated now that the average quarterly key fuels price had dropped below £1 per litre.
The letter said: “As a consequence, we will be reducing all road haulage rates, for all vehicle types on all contracts by 3% from 1 April 2020.”
The move is a double whammy for some firms working for AI, with the construction sector struggling as sites close down in response to the Covid-19 outbreak.
AI also recently announced it was applying a minimum inflationary increase to mileage rates of 2.71% - but only to franchised hauliers, leaving non-franchised firms feeling penalised.
One non-franchised haulier said: “Through no fault of our own, if we do £2,000 worth of work a week, we lose £60.
“It doesn’t sound like much, but it adds up. Over the course of a month that’s a tank of diesel paid for out of my own pocket.”
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However, a franchised haulier told motortransport.co.uk it also felt powerless to act: “We don’t have a voice over issues like this,” he said.
“I don’t even use AI to buy diesel, the price I pay for diesel should have nothing to do with them.
“We’ve only just got a price hike, the first one since 2014, now they’ve taken it away with the fuel escalator, and we’re back on the old rates.”
Ben Young, AI head of road logistics, said the low fuel costs in the first quarter of 2020 were primarily caused by geopolitical factors and the reduced rate reflected the escalator shared with all parties in November 2018: “If fuel prices had increased on average over the same period, Aggregate Industries would have increased the rates paid to hauliers, in line with the escalator’s procedure,” he said.
“This procedure is in place to ensure that hauliers are not impacted by increased fuel prices, and in turn, we are not paying over the odds in the event of a drop in the fuel prices reducing outgoings for our hauliers.”
Responding to the timing of the reduction, Young added: “Of course, we are aware of the ongoing COVID-19 situation and are considerate of the effect this is likely to have on both our own business and that of our hauliers.
“We would like to reassure those hauliers that this rate reduction increases our likelihood of being able to operate business as usual and maintain a business that continues to require their services into the future.
“We are all in this together, and it is in all of our best interests to make sure our business is as sustainable as possible in the long term.
“In-line with the fuel escalator scheme, fuel prices will continue to be reviewed quarterly, and rates adjusted accordingly.”
