Unforgiving prices

Unforgiving prices

A strong emphasis on fuel-cost savings can spread and become a company-wide mindset.

September 4, 2014

Dean Snodgrass never counts vehicles to measure the size or success of a company. In fact, the opposite approach at Dennis’ 7 Dees Landscaping & Garden Centers has resulted in a 20 percent decrease in vehicles on the road in the last five years. “We really don’t want to be in the transportation business,” says Snodgrass, vice president of the Portland, Ore., firm. “We’d rather get more done with less resources.”

Dennis’ 7 Dees has in excess of 100 vehicles and hundreds of small pieces of equipment. Its fuel budget is about a half-million dollars per year, even after slimming down the fleet by one-fifth.

Changing habits and developing a culture of awareness have been critical in reducing vehicle dependence and fuel consumption at the company. Rather than running out to measure a property or deliver an estimate, the team takes advantage of technology – mainly smart phones that allow them to map, measure and shoot off an estimate without clocking windshield time and burning through fuel.

“We share the numbers, and our people understand what our fuel cost is,” Snodgrass says, adding that foremen are cognizant of fuel consumption when pricing a job. “They see what it costs them to have two trucks on a job site or a tractor and they are actually aware of that cost.”

Employees at Dennis’ 7 Dees report directly to job sites rather than driving to headquarters, piling in trucks, then driving back out to the field. “It’s about changing habits, really,” Snodgrass says.

Saving with on-site service.

To manage fuel costs, many companies have turned to on-site fueling to avoid service stations or using card lock arrangements. Dennis’ 7 Dees does both.

Tips for the tank

The one sure thing about gas prices is they likely aren’t going to drop. Beyond the actual price of fuel, there are labor, miles and time involved in filling up vehicles and equipment. For these reasons, some landscape firms opt for on-site fueling services.

But equally important is creating a culture of awareness so employees understand their part in reducing fuel consumption.

Here are some points to keep in mind as you adopt systems to tighten your fuel expenses.

Establish best practices. Help employees understand what’s expected in terms of fueling up vehicles and equipment, and traveling to work sites. When should vehicles be fueled up?

Who is responsible for this task? How many company vehicles should be job-costed to a site, and what steps should employees take to prevent wasted miles (and fuel) – carpooling, reporting directly to job sites, etc. Conduct regular team meetings to explain processes, address questions and gather ideas. Give everyone a part in reducing fuel consumption.

Fuel up during off hours. Filling up vehicles and equipment during the workday subtracts precious labor hours from the budget. Designate certain employees to manage fuel before or after shifts.

Card-track consumption. Stand-alone card lock stations serving commercial customers allow companies to fuel up 24/7, and track use (date, time, purchase amount, etc.) through the employees’ cards and ID numbers. This gives companies a tool to better manage fuel consumption.

Vet fuel programs. Consider various fill programs and how the pricing might benefit your bottom line. “Our fuel supplier is on an auto-fill program and the price averaging has seemed to benefit us,” says Dean Snodgrass, vice president, Dennis’ 7 Dees, Portland, Ore.

Seventy-five percent of 7 Dees’ vehicles and equipment are fueled up on site. Those are the machines/trucks that report to headquarters. The rest of the fleet, belonging to satellite locations, fills up at card lock stations. This helps the company track consumption, Snodgrass says. Employees responsible for fueling up equipment have cards and an ID number. Records are kept with who filled up when, and how much fuel was purchased at what cost, he explains.

Schill Grounds Management in North Ridgeville, Ohio, has used on-site fuel for well over a decade. The indirect savings are substantial because labor gets tangled into fuel expenses when figuring the cost of a crew waiting at a gas station to fill up a vehicle. Figuring three to four crewmembers in a truck, and 10 to 15 minutes per pit stop, “That’s a huge labor cost,” says Jerry Schill, president and CEO. “With 106 people here, we can’t afford that many people sitting around.” At the end of the day, crewmembers clock out and supervisors fuel up trucks on site.

Fueling up mid-route interrupts the workflow, and “density is king,” Schill says. “The denser our routes are, with the least amount of windshield time, the better.”

Meanwhile, avoiding gasoline all together – at least for powering equipment – is a goal for some firms, including Schill. Propane costs about half the price of gasoline, Schill notes. That, and reduced carbon emissions (50 to 70 percent less than gasoline), is the reason why the company’s goal is to convert its entire mower fleet to propane by 2015. Schill currently runs 90 mowers, most of which are propane-powered.

With each mower burning through about five to seven gallons of fuel a day, that adds up to about 500 to 600 gallons per day for the entire fleet, Schill figures. “Propane is significantly less money and there is a huge abundance of natural gas and propane right under our feet in Ohio,” he says.

A team game.

A traffic jam can cost Dennis’ 7 Dees Landscaping thousands of dollars in lost time, not to mention wasted fuel. “All the while, your engines are running and the gas gauge is going down,” Snodgrass says.

There’s nothing Snodgrass can do about traffic or fuel prices. “It takes one hour to get across town where it used to take a half hour because of population and infrastructure – it’s very concerning,” Snodgrass says.

Reducing vehicles on the road and coming up with creative solutions for managing the expense can drastically reduce costs. On one project (an airport), Dennis’ 7 Dees crews took public transportation. Snodgrass says, “We joked about having a wheelbarrow on the bus – we didn’t do that.”

Rather than job costing a vehicle to a project, supervisors consider whether a gator or smaller piece of equipment would suffice. The goal is to avoid any back-and-forth driving of vehicles. All vehicles (tractors, utility vehicles) and equipment are secured on the project site and do not leave the property until the job is completed.

“We have a special driver who just dispatches and handles the logistics of getting the tractor from this to that site,” Snodgrass says. “There was a time when we would tow a tractor out to a job site and then trailer it back at night. We were pulling trailers and equipment more than we needed to.”

And, as Snodgrass notes, habit changes have resulted in a cultural shift: more conscientious attitudes about using vehicles and consuming fuel. “To have two or three vehicles meeting on a site is just frowned upon,” he says. “We work very hard to carpool and limit transportation.”

What about smaller firms that don’t run the volume of vehicles to consider an on-site fuel operation? Even with one truck and a trailer of equipment on the road, Monarch Landscaping in Bath, Ohio, must watch where it fuels up. “I’m not exaggerating, there is a $.30 to $.40 price difference a few miles down the road,” says Rick Novotny, president.

Novotny relies on sites like GasBuddy.com to alert him of the best fuel prices and times to gas up. (The prices are usually lower in the morning, he points out.)

He uses a routing feature on his smart phone to figure in gas stops at locations along his daily routes. And, he takes advantage of “fuel perks” offered by his local grocery store, which can save him $.30 or more per gallon.

The pennies add up – big time. The savings can buy him a couple extra cans of fuel per day for his two-cycle equipment and he generally goes through two to three cans of gas to run his trimmer, edger and blower.

Meanwhile, keeping equipment and vehicles well-maintained can reduce fuel expenses, too, Novotny says. He changes air filters and oil regularly, and checks tire pressure. “I have noticed that oil changes, clean air filters and changing spark plugs does make a difference and it keeps equipment running longer,” he says.

Managing fuel expenses will require continuously refining efficiencies, tapping into technology including GPS and smart phone apps and educating employees about the fuel burden so they can do their part, from carpooling to smart job costing.

“There is not much we can do to control the cost of fuel, but we need to rethink our behaviors,” Snodgrass says.