IHC Fuel Charge Out Rate

[Chris RoseKeymaster]

As you are aware fuel prices continue to drop & having got to the point where all of the fuel card reports are upto date & available to me I have managed to determine what we have paid for all of the fuel drawn on the fuel cards supplied by CEMEX for the month of December 2015.

This was 84p (excluding VAT).

As a result of the above new rate cards have been produced & sent from Rugby today, the rate change will be in effect from the 1st February 2016 is purely related to the price drop of fuel from 93p per litre to 84p per litre. Only fuel drawn on the cards on or after this date will be charged at 84p, drawings made in January will still be charged at 93p.

As a result of this change the transfer rates & guarantees have also reduced (based upon the calculations now in force from last years rate review).

Fuel continues to drop so I am unable to determine whether it will need to change again however it is important to remember that the change is purely fuel related no other elements of the rate have changed, your rates are indeed lower but then so will your outgoings be on CEMEX fuel cards. The net effect on your revenues after deductions will be the same.

I am aware that a reduction is never seen as a good thing however it is still my firm belief that the new process is far better on the whole for the community, once we start to see an increase in the fuel price which wil inevitably come to pass debates over increase costs for travel will be a thing of the past as both transfers & guarantees will automatically rise along with fuel price based on the standard calculations now in force.

Whilst on the subject of rates by way of a brief update I will be commencing rate reviews on a Regional basis very shortly as initial proposals are currently being reviewed by the senior management team.

Regards

[Robert CookParticipant]

My impression is the same as Mike’s. So not happy.

Also not happy about load rate not being changed last year on the promise that we would be busier. We are not.
Also the lack of information about being penalised for lack of availability. Those who got no rise were NOT told that they were in the 10% as was promised.

If the policy is to continue, all those currently in the very arbitrary 10% should be told now.

[Kenny StewartParticipant]

hi chris

i feel the same as micheal,i was on the understanding that guarantee day and empty running would not change if fuel changed
and the more euro 6 trucks in the fleet would be better for everyone maybe am mistaking but i am 100 per cent sure.

thanks kenny

[lewisMember]

This is the only company i know that decreases pay rather than increase. This is utter madness. Fuel will go up so are you then going to increase our wages. I very much doubt it,

[mlstevensParticipant]

Hi Chris as a member of the negotiating team last year can I ask if we miss understood you when you said during the discussions that empty running and guaranteed days payments would be based on the haulage rate at 1st April each year and not change when fuel changes.

If we have that is a shame as with the work situation in many areas at the moment there is great pressure on us to make the Owner driver model viable.

As the Guaranteed day is based on average 5 x 5 radial load for the entire fleet across the country it would be correct to presume that as there is now a lot more Euro 6 vehicles now on the fleet as you said during the negotiations this would have a positive effect for all of us. Can you tell us what percentage of the UK fleet is now Euro 6 and how this has increase since 1st April 2015?

[Martin DaltonParticipant]

It was my understanding from last years rate talks the guarantee day and transfer rate was fixed for the year and even if the fuel cost went up or down it would remain the the same for the whole year but you have now moved it down twice in this year against this.

[Chris RoseKeymaster]

Gents,

Both sides of changing the sundry rates or not changing the rates was discussed around the country last year. Obviously with differing views at different locations, I can manage the rates either by them fluctuating or not fluctuating however with the rate itself changing based on fuel it seems only right that the other elements that have valid formulas change also.

Rest assured that when fuel goes up the rates for these sundries will go up as will the load rate, it is pointless having a standard formula then not using it both ways, in the same way that in a volatile fuel market it is counterproductive to have either inflated or deflated sundries that have fuel elements in them not move for over a year.

From a logical standpoint if we do not move them as fuel fluctuates then in a market such as this come the time to renegotiate the new rate will either be loo low against current for the IHC community to accept (when fuel is dropping) or too high against current for CEMEX to accept (when fuel increases). Generating our age old problem of lengthy negotiations.

The method of moving them along with load rates is by far the fairest way of dealing with the issue as it means that the rates follow your actual costs as & when they change.

This of course does not mean that we will never ever discuss the formula for these sundries & or others as I firmly believe that we still need to fine tune the transfer formula & determine whether there are similar formulas we can use for other sundries.

On the subject of Euro 6 vehicles we have had 25 new 6 metre vehicles go into the fleet since April 2015 this will have had a positive impact on the average 6 metre 5 radial rate and can only further improve as more new vehicles go into the fleet.

Regards

[Dave GibsonParticipant]

Hi Chris

You certainly know the best time of year to stir up trouble among our community. I do believe it was said in your letter that if the price of fuel changed by 3p a litre up or down then you would be changing the haulage rate accordingly. It was also said that the day Guarantee would be based on 5×5 radial loads which it does not. Historically the guaranteed day never changed until negotiated again the following year.

This change when fuel changed was not agreed to at all and why do it at this late stage when you will be talking to us all about the rates and sundries anyway or is this it this year. It is now February and no rates talked about lets get together asap and start the process because everyone is concerned that this Company will be no more soon. And that’s not just my view many customers are saying it too.

Regards
Dave

[Paul JeffreyParticipant]

The load rate is irrelevant if your only doing 1 or 2 load a day? It’s been years of cemex promising more volume/production and im still waiting. (false promises)

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