Turf Magazine - October, 2008

CENTRAL FEATURES

Battling High Fuel Costs

With the cost of gasoline at record-high prices this year, what’s a landscape contractor or lawn maintenance guy to do? Turns out, there’s a lot. From cutting back on distant clients to placing a surcharge on the lawn care bill, from increasing capacity of trucks to looking at more fuel-efficient vehicles, green industry businesses across the country are coming up with ways of pushing back against the high cost of fuel.

Photo courtesy of Dain Hubley/Stock.xchng.

California

Kevin Whiney, owner of Precision Landscape & Turf in La Habra, says that the astronomical gas prices in this state have led him to do some serious budget whittling. With 90 percent of his business being landscape maintenance, his crews are on the road all the time and cover a large area. The first thing he did when gas went over $4 a gallon was call a meeting of employees, where he outlined several measures to save gas.

Employees were asked to cut down on unnecessary trips and schedule trips so that several jobs can be done on the same day or route—that includes reducing trips to buy lunch, a big fuel burner in the landscape industry. He says he himself was possibly the worst offender, so he started paying attention to setting up client visits in the same area for the same day.

He also asked that employees holding company credit cards gas up their trucks only at one gas station, the one near company headquarters, and announced that he would monitor the time when they fill up. That not only dictates that they will gas up at a station that is a little cheaper than others, but also cuts out any unauthorized fill-ups. No gassing will be allowed anywhere else unless in an emergency situation. He noticed an immediate and marked decrease in the company gas bill.

Precision’s sales amount to $3 million a year, and his average gas costs rose from about $7,000 a month in 2007 to a projected $12,000 per month in 2008. One focus will probably be a cutting back on long-distance clients and adding a surcharge on those that are more than 10 miles from La Habra.

A surcharge is the most immediate method of compensating for unpredicted costs, though long-term contracts may have to wait for new negotiations or bids. He has also notified clients that he will be increasing the cost of emergency maintenance visits, as well as irrigation parts that require an additional trip to the store.

One thing Whiney is pleased about is that he has already made some changes to vehicles that have paid off. He uses mostly Ford F-150 and F-250 trucks, and he has been beefing up the springs and lightening the loads by installing aluminum floors and sideboards. He says it is surprising how much weight that can save, and that translates to fuel savings. He says he is able to use a Ford F-150 with a six-cylinder engine, which is a significant gas savings over a 250 with eight cylinders.

This gas crisis has made him decide that, with 15 vehicles on the road at any one time, he will in the future buy more fuel-efficient ones. He predicts that his fleet in the next five years will look completely different than it does now, and he will buy Fords—his favorite—only if they provide the efficiency he wants.

“Whatever the miles per gallon are, that’s where we’re going,” he says.

Filling up is hard to do in this day and age, but companies are finding creative ways to ease the pain. The Lawn Ranger in Minnesota has a number of tricks, and one of them is to have its own bulk tanks at its yard.

Tennessee

Tom Sowinski, owner of T & S Landscaping in Nashville, has a different approach to things. He has only 10 employees and does a lot of general landscaping, primarily for high-end subdivisions, and one of the ways he’s coping with fuel costs is to cut back on the maintenance side of the business. As far as taking on new lawn maintenance clients, he will take on someone who is blocks out of the way, but not somebody who is miles out of the way.

“What I’ve had to do is really look at the bottom line,” Sowinski says. The maintenance contracts he signed last fall were bid when gas was $2.60 per gallon, and that doesn’t cut it anymore. As a licensed and insured contractor, he is competing against mow-and-go companies, and that’s tough. He has focused on maintaining his vehicles a little better to keep mileage up. That goes for mowing equipment, too. He avoids buying diesel equipment because of the extra cost of fuel.

With his profits down about 15 percent over last year, Sowinski is focusing on construction rather than mowing because that’s where the healthier profits are. Beyond that, there is less travel involved in an installation job—a crew might be there for a week or more, whereas lawn cutting involves going to several sites per day. That gets to be an expensive part of business when gas prices rise by over 50 percent. He has also asked employees to tighten up on extra trips, especially for lunch.

Sowinski’s measures are helping. He says his crews have driven fewer miles this year than last year. One factor is that he isn’t taking any new clients who are 5 miles out from his current client zones.

Minnesota

Joe Unger, owner of The Lawn Ranger in Eden Prairie, says that his company keeps close track of fuel costs, and they are not a significant portion of a company’s budget, much less than other operating costs, such as labor. Part of the reason he doesn’t worry much about it is that he has always undertaken efficiency measures.

One of the smartest things he did was to install bulk gas tanks at the company yard. He arranged for a local gas cooperative to install two 1,000-gallon tanks at no cost, and he pays “a little less” per gallon by buying in bulk. It’s not a situation where he can order gas when it’s cheap, because a company doing $7 million in sales uses about 25,000 gallons every month in the summer. Apart from the per-gallon savings, he also saves by not having crews driving all over town and buying gas. Crews fill up at night when they return to the yard, which is a tremendous timesaver.

“We’ve been able to battle our fuel costs effectively,” Unger notes. He used to have flatbed trucks, or pickups with trailers, and would have to take two or three to a big job, but the Izusu box trucks that he has now carry everything needed for a job, which usually means one or two trucks at most on a job site. That reduces travel quite a bit, and crews don’t have to be running back and forth to the shop or stores for supplies.

Unger has also had GPS tracking devices installed on a handful of trucks to track vehicle movement. He had only had the devices for a week and was already noticing some “eye-opening” tendencies of drivers. Those systems are not cheap, he says, but they have cut down on two-hour lunches and given insight into efficient routing.

One of the best hires The Lawn Ranger made was hiring an efficient scheduler last year who coordinates all jobs and vehicle trips. Now, all supplies are ordered a week ahead of time and are delivered to the yard, which saves having a company employee go get them one piece at a time.

“That has saved us a lot of money,” Unger says. One step beyond that, he plans to have an irrigation supply shed built on the property and have it stocked by an irrigation specialist. It will that give the crews on-site access to all their irrigation supplies, and will also allow them to call the parts distributors and have them deliver the restock items.

In general, Unger says that an efficient company should not worry about the escalating cost of fuel because it is a small percentage of operating costs. By midsummer, he had only spent $4,000 more in 2008 than he had during the same period of 2007, with total fuel costs going up from 4.8 percent to 5.9 percent—and some of that could have been due to increased business. He acknowledges that the efficiencies he has established are part of the reason for his small increase, but it reinforces his claim that fuel “is really not a factor” that his company needs to fret over. In fact, he has no plans to raise prices.

Fuel savings have become easier for the Lawn Ranger after it went to box trucks, which carry more and reduce trips.

Oregon

In southeast Portland, Paradise Restored Landscaping is not in a good location, according to Caitlin Severino, office manager and scheduler, and the company’s idea for fuel savings takes a broader scope. The plan is to find a more central location soon that is closer to a freeway where the company’s seven maintenance crews will have more efficient access to clients all over the city and in Washington state.

“We also advertise in specific areas so clients are closer together,” Severino says. This is part of the overall plan to tighten the client base in relation to the home office. Potential clients who call from outside their base zones may not be taken on, and a strict route scheduling policy has been instituted in order to keep particular crews in one part of the service zone each day. This was all spurred by the rise of fuel costs, though it needed to be done anyway.

In addition, Severino says, an experimental price rise to clients was implemented. Sixteen letters to clients who are far from the yard were sent out, and to the company’s surprise only two called in to question a price rise. Clients understand the situation, she says, and the company has prepared to let clients go if they are so far from base that they are not profitable.

Florida

To show that even small companies are feeling the effects of fuel price rises, there’s Mike Faust in Tampa. His Florida Greenscapes has only one vehicle, a pickup, but he is having to find ways to cope with the extra cost of gas. He is putting stake sides on the pickup so he can cut his trips to the trimmings dumpsite by half.

“That’s going to cost me $580, but I will save that,” Faust says, because the commercial dumpsite is across town from most of his jobs. With about 120 clients, he has seen his fuel bill go from about $600 per month to $1,000 per month. The other measure he has talked about with his clients is to add on a $5 per month surcharge to their bills.

“He said he didn’t care, go ahead,” Faust says of one long-time client, which indicates that everybody in the economy is aware of the high cost of fuel and the sacrifices that will have to be made.

Don Dale is a freelance writer and a frequent contributor. He resides in Altadena, Calif.