Battling High Fuel Costs
How companies are coping around the country
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.
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
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.
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
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
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
“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.
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
“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.
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
“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.