Soaring price of fuel hits school bus companies and some districts

In the last few weeks, commuters have paid all-time highs for fuel — and so have school bus companies.

"We have a fleet of almost 600 vehicles, which primarily are yellow school buses,” said Ron Ernenwein, president of AA Transportation in Shrewsbury, Massachusetts. “The vans are all gasoline, but all of our yellow buses are diesel," and most school buses use the higher priced and slightly more efficient fuel.

Ernenwein's company leases buses to 18 school districts around Worcester. Those iconic yellow school buses take about 100 gallons of fuel.

John McCarthy, a second-generation school bus contractor in Brookfield, said his fleet of 150 school buses burn about a thousand gallons a day.

"Every time a bus moves, it's going to cost you, we know off the top of our heads, about $4.50 to move a bus seven miles,” McCarthy said.

Fuel wholesalers thinking day-to-day

McCarthy has contracts with school districts in Hampshire County east to Worcester, including students traveling to regional vocational schools, sometimes 80 miles a day roundtrip. He is watching the current fuel cost spike closely, speaking regularly with wholesalers who often buy fuel futures — locking in a price for a period of time.

But not right now, McCarthy said.

"Now they're buying day-to-day, because if there's a big drop [in price], they don't want to have, you know, 100,000 gallons at a price that they're not going to recoup,” McCarthy said. “So the conversation I had just with my dealer [a week ago] was, we're playing it day-by-day, hoping there's going to be a dip soon. It’s a commodities issue."

It’s market speculation, with uncertainty around Russia's invasion of Ukraine, and with the U.S. ban on Russian oil in place. But fuel costs had already been rising for about the past year.

While many districts lease school buses, some have own their own fleet and fuel up through their municipality, along with public safety and highway vehicles.

McCarthy said in his case, as vendor, it's the bus companies who are bearing the brunt of the current higher prices.

"Some contracts [with] some school districts, when we did submit a bid, they allowed for us to put in a rider that says if fuel goes above a certain price, we can get some adjustment in compensation,” McCarthy explained. “For me, that's a minority of my contracts. It's less than a third of my fleet, so it's a drop in the bucket, but it helps.“

For the last several years, even before the pandemic, school districts were already cutting back on bus routes to either save money or because of low ridership. If high fuel prices continue, more routes could be cut, and also more requests of families to pay for field trip buses, or buses to get teams to their games.

Drew Damien is the head of transportation in the Palmer school district, which leases 11 buses. He's also president of the Massachusetts Association of Pupil Transportation.

"I'm in touch with districts all across the state, from Cape Cod out to Pittsfield,” Damien said.

At the height of the COVID-19 pandemic, as students physically began to return to school, the number of kids riding buses was way down, Damien said. In Palmer and statewide, ridership has not completely recovered.

"So one of the things that I'm ... looking at [is] if I have a bus that will seat 71 passengers, how many people am I putting on it?” Damien said.

Electric buses are a long way off

While school buses of the future may be electric, and some districts do have a few, the majority of buses aren’t, and they are definitely not fuel efficient, Damien said.

“I mean, amongst everything else, they are as aerodynamic as a filing cabinet,” Damien said.

Battling the wind takes a toll, as well as all that starting and stopping, he added. On this day, Damien had just received an invoice from his school bus vendor. Palmer’s contract has one of those fuel riders. They pay more or less for fuel based on the market.

Last month's adjustment was more than $1,000, Damien said — about $100 more for fuel per bus.

"And I'm sure that that's the smallest [increase] I'm going to see in the next couple of months,” Damien said.

Schools can budget for a little bit of volatility, Damien said. But what's happening in the energy market not only impacts how they move students on buses. It's also about heating schools, heating homes and getting people — including bus drivers — to work.

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