If there’s one line in the ledger that’s screaming with pain these days, it’s the one for fuel expenses. Any business that depends on a fleet of vehicles is struggling with fuel costs, especially those depending on diesel.
One thing is pretty clear: There’s no single, sweeping strategy that will take the hurt off the bottom line. Instead, there are a number of smaller tactics that address individual facets of an operation.
For some businesses, it’s using a fuel card that allows a discount and may offer perks like cash back or frequent flyer miles. For others, it’s moving dispatch and tracking functions to software that optimizes routes. Still others are casting more than sidelong glances at hybrid vehicles. These three contractors share steps they’re taking to keep their fleets rolling affordably.
Bob Foster, field manager responsible for a 17-vehicle fleet for Aqua Source Group Inc. working in and around Rochester, N.Y., is keenly attentive to small things he can do to reduce fuel consumption. His company was already managing dispatch to run denser routes. “If someone is in one area, their route is planned so they stay in that area and aren’t running around all over the place,” he says.
Aqua Source continually reminds drivers to keep their mileage down and to avoid unnecessary trips. “We also buy our gas in bulk so we get a per-gallon discount, and we store it in tanks at our yard,” says Foster. “That helps. We also remind drivers not to gun the engines, and other gas-wasting stuff. But you know, they’re going to do it sometimes.”
Fernando Chavarria has been running his own business, Chavarria’s Plumbing, for more than a quarter-century. He led its evolution from a franchise cleaning firm to a full-service entrepreneurial venture on the Mexican border. He now runs a fleet of 23 trucks, so fuel takes a huge bite out of his operating budget.
“We coordinate all our activities the day before, synchronizing all the work that has to be done that day so we can create the most efficient route,” says Chavarria. “We use a GPS tracking system tied into proprietary software we had programmed just for our needs.” Along with a dispatching feature, the program handles job numbering, customer contact management and invoicing.
Because most of his fleet is fairly new, precluding the purchase of many smaller trucks, Chavarria is being creative with vehicle usage. “We try to save fuel by using the smallest truck possible for the job, but we’re also trying a different approach,” he says. “We’re looking at putting larger tanks on smaller trucks to accommodate more volume per run.” Some roads and access bridges won’t accommodate anything larger than what he’s now using, so dispatchers consider that when planning routes.
The company also allocates larger trucks to the longer routes, again saving on individual trips. One of Chavarria’s largest challenges is addressing the multiple 150-mile trips to haul waste to public treatment plants for processing.
“We don’t have a disposal site nearby, so I’m investing in a dewatering separator,” he reports. “This will drastically reduce load volume. We can store dewatered sludge on site until there’s enough for a load to transport to the treatment facility.” He expects to see fuel costs drop drastically once the dewatering system goes online.
Tom Vecchiolli, office manager with Paramount Plumbing, a full-service firm on the outskirts of Philadelphia, says the firm has done two things to address fuel costs.
The first step is internal.
“Our office administrator now works from home one day a week, telecommuting instead of driving,” he says. “We’re tapping into our PC over the Internet via a remote desktop application called GoToMyPC.com.” A call-forwarding feature takes care of routing calls to the home office, and Vecchiolli reports that it is working out well.
Externally, Paramount is trying to recover some of its fuel costs by raising its standard service fee by about 10 percent. “We’ve always charged a service fee to cover the cost of getting a service person out to the caller’s location,” Vecchiolli says. “The fee is graduated, based on zones in 5-mile increments from the office, so it reflects actual costs. Fuel prices just forced us to tack on a bit extra.”
The company instituted the increase in mid-May. “Some people are objecting more to that fee now, maybe 7 to 10 percent of all our callers,” reports Vecchiolli. “Some people have always had a problem with it, but a lot of people understand why we need to do it. They know because they’re dealing with those costs, too.”
