Index-linked pricing

When steel moves, the price moves, by the contract's rules.

A steel fabricator quoting a 14-month job cannot hold today's price for plate. Neither can a carrier hold today's diesel. Apex links a price to the index the contract names, applies the cap and floor, and re-prices on the agreed dates, with the calculation shown to both sides.

Start with index-linked pricing

Index · hot-rolled coil, $/tonContract C-0418 escalationRe-price Jan 1

Base price, Jan 2026$1,940 / ton

Index change+7.8%

Applied, capped+6.0%

New price, Jan 2027$2,056.40 / ton

An escalation clause, as Apex reads it

Every term an escalation clause needs, in one place.

Illustrative. A hypothetical structural steel package on a 14-month contract.

Index: A published hot-rolled steel price index, monthly average
Base: The index value in the month the contract was signed
Share of price: 60% of the line price moves with the index; 40% is fixed labor and margin
Cap and floor: No more than 8% up or 5% down per adjustment
Dates: Re-priced quarterly, on the first business day
Notice: The customer receives the calculation 15 days before it applies

Each adjustment date

What happens on a re-pricing date.

01
Read the index
The index value for the period is recorded with its source and date. You choose which published series each contract follows.
02
Calculate
The new price is worked out from the base, the share that moves and the cap or floor, line by line.
03
Review
The adjustment waits for a person, with the calculation shown, before it changes any price.
04
Apply
Approved prices apply to orders and invoices from the effective date. Earlier invoices are untouched.

Where it applies

Construction, logistics and manufacturing, each with its own index.

Construction

Steel, copper, lumber or a construction cost index on long jobs, so a fixed bid does not become a loss.

Logistics

A fuel surcharge tied to a published diesel price, recalculated weekly or monthly.

Manufacturing

Resin, aluminum or energy pass-through on multi-year supply agreements.

Services

CPI escalation on annual renewals, with a cap the customer agreed to.

Agents propose, people approve

The agent drafts. A person decides.

An escalation agent reads the clause in a signed contract, drafts the index, base, share, cap and dates, and cites the wording it used. A person confirms the terms, and approves every adjustment before it applies.

Every agent stops at an approval gate until it has earned its way out of one. Nothing releases cash, commits spend or touches a customer without a person saying so.

Your dataModels that read your data run inside your environment, behind your firewall. No client data reaches a frontier lab.

Apex’s agents Why the approval gate

Start here, keep the foundation

Start with index-linked pricing. Add the rest without starting over.

Start with index-linked pricing on the contracts that carry it. Apex brings your customers, items and price lists down from the ERP into your Ferrata foundation, so escalation applies to real prices. When you add invoicing, adjusted prices flow straight onto the invoice lines.

FAQ

Questions, answered plainly.

What is index-linked pricing?

Index-linked pricing ties part or all of a price to a published index, such as a steel price, a diesel price or CPI, so the price rises or falls with that cost. The contract sets the base value, how much of the price moves, any caps and floors, and the dates it is adjusted.

Which indexes can Apex use?

Any published series your contracts name. You record which series each contract follows, and index values are entered or imported for each period with their source. Apex does not license index data; you use the sources you already subscribe to.

How do caps and floors work?

A cap limits how far a price can rise in one adjustment, and a floor limits how far it can fall. Apex applies them to each adjustment as the contract words them, and shows the uncapped figure beside the applied one.

Are past invoices re-priced?

No. An adjustment applies from its effective date. Invoices already issued keep their price, unless the contract specifically calls for a true-up, which is set up as its own term.

Does the customer see the calculation?

Yes. Apex produces a notice for each adjustment showing the index values, the base, the share that moves and any cap or floor, so the customer can check the arithmetic.

Can one contract have several indexes?

Yes. Different lines can follow different indexes, for example steel for material and a labor cost index for installation, each with its own share and limits.

Related in Apex

From Ferrata Labs

Start with index-linked pricing, or talk it through first.

Thirty minutes with Ferrata Labs on one workflow. You leave with a view of where Apex fits, and an honest answer if the sequencing is wrong and you should fix something else first.