FUEL COST NOT AN ISSUE FOR PAPER IN MAINE Bangor Daily News realigns routes, devises formula to assist carriers with gas.

The high cost of fuel sparks a job action by carriers in San Jose, but one paper in Maine has defused the issue through a carefully crafted policy of tying payments to its carriers to a monthly gasoline price report.

The San Jose Mercury News ended nearly a week of delivery disruptions by giving its carriers, all independent contractors, a 12 percent raise (boosting their monthly profit from $1080 to $1210) and changing two rules concerning collections and fees.

In a statement, Publisher Jay Harris concedes that the carriers "brought some legitimate concerns to our attention" through their job action, which impeded delivery of the paper Oct. 8-12.

A few days later in San Francisco, a small group of Chronicle and Examiner carriers disrupted delivery Oct. 15, demanding higher fees even though they had been given a five-cent-per-copy increase in the fee paid to deliver the Sunday paper during the holiday season. The paper declined to meet the new demands and said the carriers would be replaced.

Last spring, the Bangor Daily News overhauled its payment policy after a "complete evaluation of every motor route by miles and customers," says Jim Hayes, who wears three titles at the 65,700-circulation paper: assistant circulation manager, distribution manager and fleet manager.

In February, gas was hovering around $1.40 a gallon; across Maine now, it's $1.55 to $1.70. Using a monthly average gas price report for Maine provided by the American Automobile Association, the paper gauges how much to augment the weekly commission checks its 150 motor route carriers get.

Hayes likes the report because it is statewide, "so we get a good cross-section" of current gas prices. And gas can be a big expense for drivers who truck papers more than two hours south and nearly four hours north.

A five-cent increase in the AAA figure will bring a fuel payment of one-third cent or more per mile. A decrease will be watched for two months; if it holds, the fuel adjustment will dip as well.

"We think it's working out pretty well as far as being a fair way for compensating everyone," says Hayes, who uses a floor of $1.35 per gallon and assumes carriers' vehicles get 15 miles per gallon. He also acknowledges that some routes are evaluated separately because of higher gas prices in local areas.

The Daily News launched its route evaluation in March, finding significant discrepancies in miles driven and customers served. The last adjustment was made in 1996, when compensation was set at 84 cents per week per customer. "Could raising that to 87 cents be that simple? No," Hayes says, "it was going to be a little tougher for us."

Since implementing the program in June, the paper has paid as little as $930 per week in August in total fuel adjustments, and as much as $1870 per week in July. Hayes balances these costs, which are calculated for each route in a spreadsheet created last spring, against carrier turnover in a tourism-driven economy.

"We've faced some higher turnover this year," he says, but the adjustment has bought goodwill from carriers, as did the overall reevaluation of routes. "When we first started, they were grateful to see anything."

The route revisions brought to light problems across the board, Hayes says. "What we ultimately are getting out of this was a measurement of our routes and seeing what the actual commission per mile turned out to be.

"Some people were making an astronomical amount when you look at the number of miles and customers," he says, while others "were underpaid for the number of miles they were going."

-- P.W.