Spiking Gas Prices Raise Carrier Compensation, Recruitment Issues

By: Mark Fitzgerald

Increasing gas prices that are beginning to force the owner-operators of long-distance trucks is pinching newspaper carriers, and the papers that contract with them.

“We’re feeling it probably the same way everyone else is — we’re having a lot harder time recruiting, and we’re looking to possibly change the compensation for the carriers we do have,” said Brandon Grose, circulation director for The Sedalia (Mo.) Democrat.

Like many papers, the independent contractors who deliver the Democrat work on one-year contracts. Several have begun to grumble about dropping the route once their contracts expire, Grose said.

?We’re probably going to have to re-negotiate the contracts,” he said. “We’ve had several routes that are putting in their notice to give up the contract and give up the route. We had the same issue the last time gas went to $3 (a gallon).” Right now gas locally in Sedalia is $2.98 a gallon, Grose added.

Soaring gas prices are nothing new to the newspaper business, of course, and some papers have already written in fuel allowances that increase — and decrease — as the gas price fluctuates.

That allowances goes up at 20-cent intervals tied to the price of gas around Du Bois, Pa., said Jim Nestlerode, circulation director of The Courier-Express. The fuel allowance was instituted more than a year ago, and has made a difference in keeping carriers, he added.

“They see that we are responding to the fuel increases,” Nestlerode said. “We spell it out in the beginning, so they know ahead of time what they’ll be getting if the price goes up.”

The Post-Standard in Syracuse, N.Y., has had a similar system in place for about a decade, Circulation Director Jeffrey A. Barber said. Allowances are adjusted quarterly based on a survey of prices at local stations. “If the price of gas goes up or down we have a subsidy we apply either to the bill or the per-piece payment,” he said. “So while gas has been somewhat of an issue (in recruiting and retention), it keeps the carrier force stable.”

Would, however, that gas was that stable. In the last quarter, the Post-Standard had to raise its subsidy two notches. And occasionally in the past, the paper has adjusted the allowance before the quarter ends.

“If you get a very rapid rise in price, then people start to get a little antsy,” Barber said.

Spiking gas prices raise the newspaper’s costs when allowances kick in, but it’s just the cost of doing business, he added: “The bottom line is, it saves us in turnover, and in not having to have managers deliver a lot of down routes.”

Gas prices probably have the most impact on recruiting new indepenent contractors, circulation executives say. The Sedalia Democrat, for instance, has to do much more than run a house ad to attract carriers. “We’re thinking of putting up yard signs, and that would be a first,” Circulation Director Grose said.

And while gas prices may be the reason carriers cite when dropping their route, it’s probably not the real reason they are leaving, said Kevin Smith, circulation director of the St. Joseph (Mo.) News-Press.

“One of the plethora of reasons they give for leaving, and they always do, is fuel, but when I really dig into conversations with them, fuel, I don’t believe, is the real reason,” he said. “They mention it because we (in newspapers) constantly barrage them with news of gas prices, and they hear it on the radio. But the main reasons they leave are the same as they’ve always been. I’ve had shift change at my day job. Or I’m burned out. That’s probably the biggest reason.”

The News-Press, at random times, makes cash payments to its carriers in recognition of their added fuel costs.

In his nearly two decades of experience in newspaper circulation, Smith added, the state of the economy in general never seems to make much of a difference in the turnover rate.

“Our carriers now are makin less than they did three years ago — they are, but I don’t think that’s at the root of turnover,” he said.

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