Strategies for Reducing Fuel Costs

BETTER ROUTING

Short of reinventing their existing truck/trailer package, like the above contractor did, landscapers are focusing on other things that can help cut back on the fuel their rigs are burning.
Mapping software and GPS devices are being widely used. As one contractor put it, drivers might learn about a shortcut they never new existed.

Better routing is huge. A full-service Florida firm said it has consolidated tasks as much as possible to reduce the number of visits to a property. For instance, their maintenance crew now does irrigation checks and installs annuals to avoid sending another crew.

Here are some other tactics being used by green industry companies:
• Market area has been divided into four zones, which are handled Monday-Thursday; jobs are being scheduled by zone on that zone’s given day; Friday is a catch-all day
• In neighborhoods where maintenance or lawn care contracts already exist, incentives are given to potential new customers in an effort to build up the client base in that area
• Although a little risky, perhaps, one Indiana company said it has begun parking its truck and trailer “in the city” closer to the properties it maintains; this has dramatically cut back on miles logged to and from the shop
• Working fewer but longer days is an increasingly popular tactic. For one North Carolina company, a four-day work week has helped slice fuel usage by 20% while still maintaining production levels. In Florida, that design/build contractor said longer shifts, sometimes 15 hours for a three-day work week, have actually had a positive effect on production—and employees have yet to complain.

CHARGE FOR IT

For some companies, clients have yet to complain about paying more for services. “I initially raised my prices 3-5% this season, and also use a fuel surcharge when needed on larger projects,” said one Pennsylvania contractor. “No one has complained or discontinued my service.”

Fuel surcharges appear to be the most popular way of passing the increased cost along to the customer. “I implemented a transportation charge this year,” said a Tennessee landscaper. “Clients expect a rise in prices now to relate to the fuel costs. So I keep other costs the same, especially for those services where customers are a little more price-conscious. A line item for the actual fuel costs associated with their project has worked well.”

A Kansas contractor says he’s been forced to implement a 7.5% fuel charge on typical billings this year. “On landscaping and other large projects, we have a flat fee of $65 per day to help offset fuel in the equipment as well as the vehicles.”

In South Carolina, all contracts for one landscaper now have a separate line item for fuel. “The estimated annual fuel usage for the contract is adjusted on a monthly basis (up or down),” the contractor explained. “Since we use more diesel than unleaded, fuel costs are weighted at the proper ratio to compensate for the difference. After some additional tweaking earlier this year, we are essentially billing out what we are spending on fuel.”

While some contractors are instituting fuel surcharges, others are simply raising their prices. In Georgia, a lawn maintenance operator did an analysis of the fuel increase over the past six months. He then increased his prices by that percent, plus another 5% to allow for potential fuel price increases going forward.

An Indiana landscaper has tried to combat the increase in fuel cost by raising his rate on new customer contracts. He signs all customers up on an annual service agreement, so they pay a set rate every month. “For new customers, I figure out how much fuel (at $5 per gallon) and labor (at $30 per man hour) it takes to service their yard,” the contractor related. “I then charge what I need to make at least a 30% profit.”

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