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There are few hauliers willing to call their customer's bluff like Scunthorpe's John Burgin, but he reckons his stance has saved him money.

Last week, CM reported how the boss of steel and general haulier Intake Transport gave all his customers an ultimatum: accept a fuel price surcharge, or it would stop working for them. In effect, it represented a 7% rate increase since the end of February.

Burgin admits it took balls  to do it, but he adds: "It's a cut-throat business. What's the point of running at a loss?" His approach lost him two "big" customers, but he is unrepentant: "Why should I subsidise the big companies? I don't just slip the price up to turn a profit. I want a comfortable profit, but I'm not there every week cap in hand."

And Burgin says all hauliers must do this if they are to remain afloat in the choppy waters the industry is currently sailing in. But just how easy is it to introduce a rate increase?

John English Transport, which runs three trucks and does mostly container work out of Felixstowe, thinks it's tough. Owner John English says: "I don't get much choice if I work for a big company. All I do is write telling them how much my costs have gone up and are there any increases in the pipeline. I did that last week and once in October. In October, I got a penny a mile. Then fuel went up and I got 4% from one customer. But it hasn't changed now since October."  

English says container work has dried up recently, meaning he is not in a position to bargain: "It's all quiet, there's no negotiating power out of Felixstowe at all." But he is gritting his teeth and willing to play the long ball: "This year will be very telling. If you can come through this year, you might make money in a couple of years."

Over in the North-West, Suttons Group says it hasn't had to resort to the "blunt tactics" that has allowed Burgin room for manoeuvre. Suttons' group MD Andrew Palmer says: "What we have in a number of arrangements with our larger customers are fuel regulatory mechanisms. We have a transparent system, which tracks fuel price movement. After a certain point, we apply a level of increase.

"In the past, most of those were on a quarterly basis. Over the past few years, it's become monthly, albeit monthly in arrears so there's a cash flow effect, obviously."

Palmer thinks that the chemicals and fuel sector in which it operates helps: "People are very well informed of what's happening," he explains. "It's not easy, we have to be very clear and open about what we are doing. Life is never easy when fuel costs are going up 20%-plus in a 12-month period."

Stiller Group's commercial general manager, John Welsh, says he can't understand why any large organisation wouldn't introduce a fuel price escalator (FPE). It foresaw fuel price rises and introduced FPEs in all its contracted work.

Welsh adds: "It should be a standard part of any contract. It just maintains your margin. When we discuss this with customers, there's almost a resigned inevitability to it they know from their private motoring. But we get it considerably cheaper through bunker arrangements, which takes a little bit of the sting out of it."

"Customers are aware of what's going on in the market. I think that some of them are sat waiting for the call. It's down to a company's personal attitude our position would be very much aligned to Burgin's," he concludes.