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Post Haste Adapt the Fuel Adjustment Factor (FAF)
Friday 30 November 2018, 10:37PM
By Beckie Wright
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Post Haste is New Zealand’s most extensive courier network, but they are being affected by the high price of fuel, just like the rest of us, and as they say, few people in this country are unaware of the impact of those pesky fuel price variations. Many of us check the prices as we drive past petrol stations, in the hope that these will dip just before we next stop at the pumps. The more cost-conscious among us swipe our loyalty card when we fill up, for a precious saving of 6c, 10c or even more per litre.

Major cost component Freight companies like Post Haste keep a weather eye on fuel prices too, as this is a major component of their operating costs. Of course they can’t run their business without fuel, be it petrol, diesel or hybrid motive power. The Fuel Adjustment Factor (FAF) was introduced several years ago as a means of recovering increased fuel costs (primarily diesel), to fairly compensate our contractors and line-haul operators for such increases, and to cover increased airfreight and inter-island ferry fuel costs, which are of course always passed on to them.

How and when is it calculated? FAF is calculated on the first day of each month and is based on the average diesel price from two months earlier (as published by the Ministry of Business, Innovation & Employment). For domestic courier services, Post Haste use a base rate of $0.95 (diesel pump price incl GST). Every 1c movement above the base rate results in a 0.1% increase in their pricing. This is automatically adjusted on the invoices they send to their customers.

By using this ‘variable index’ mechanism, they aim to provide transparency in terms of how FAF is calculated. It also takes into account any shifts in fuel prices that significantly affect the price of transporting items through their network. From June to October this year, FAF has increased from 5.2% to 7.5%, reflecting both the present weakness of the NZ$ against US$, global political instability, and any additional fuel taxes (‘excise duty’) being imposed or adjusted by the government.

Every month Post Haste update FAF information on the Post Haste website, showing the increase or decrease for that month, so for more information on courier tracking NZ, sending parcels NZ, freight quotes and courier tickets please go to http://www.posthaste.co.nz .



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