Fuel smart

Fuel keeps a landscape business running, but the cost can be a killer without careful monitoring and diligent budgeting. The good news is there are more tools out there than ever to help track fuel consumption and improve economy. Plus, several years of serious gas price spikes have taught business owners lessons about the importance of watching those pennies at the pump to maintain profitability on jobs.

This month, Lawn & Landscape spoke to three companies about how they manage fuel expenses and the systems that keep them running strong. Here’s what they had to say.

Fueling alternatives

Trucks in the Sebert Landscape fleet travel no more than 20 miles per day during the green season because of tight routing. The 170 trucks are not guzzling the bulk of the gas consumed annually at the company. It’s the equipment – mowers, hand-held equipment and skid-steers.

And, according to Steve Pearce, general manager, this season the mowers have been putting above-average hours on commercial properties in the Chicago area where Sebert is based.

When the ground dries out, crews are encouraged to really examine whether mowing a property is essential. “Crews want to mow because they want to do a great job, but there are times when you just don’t need to mow and we instruct our crews to revert to using that man-hour time to details on job sites (in late summer) when the weather is dry,” Pearce says.

During drier summer days, Sebert may pare down to four 10- to 11-hour workdays rather than five days of operating in the field. “We end up with basically the same amount of man-hours per week, but we are not driving those trucks around or taking the mowers out and we can take one day of fuel use out of the picture.”

Fuel savings like this can make or break a fuel budget, which involves careful tracking, monitoring and input from key managers. Sebert spent about $1.3 million on fuel last year.

The annual process includes figuring the average fuel consumption per crew. Then, the company anticipates 15 percent increase in fuel prices for the coming year, which has generally been the price trend at pumps in Illinois, Pearce says. The company also accounts for an 8-12 percent annual growth rate.

“We keep our fuel budget in line with where we think the market will be,” Pearce says, noting that Sebert is conservative so the company doesn’t lose money if fuel prices increase. Adding a fuel surcharge is not an option. “We tried that in 2009/2010 and it was just a small surcharge, but we cut that out right away. It wasn’t a good business decision based on our clients’ reaction to it,” Pearce says.

Some efforts Sebert takes to reduce fuel consumption that make an impact on the bottom line include using the trucks’ GPS system to monitor idle time. An “idle alert” email is emailed to supervisors when trucks idle for longer than 30 minutes. Then, based on the situation, crews may get a gentle reminder about the status.

“Because we use our trucks as tools, there are a lot of reasons for leaving trucks running – such as moving through a property to pick up debris,” Pearce says, adding that the company does not want to be “Big Brother” about idle time. “But we educate our crews that we don’t want to see idling. Turn off the truck.”

Also, 70 percent of Sebert’s mower fleet runs on propane fuel. The up-front cost of propane is a bit less than gasoline, though per man-hour the fuel cost ends up being about the same because a mower will use about 1.25 gallons of propane to 1 gallon of gas. But the ability to fuel mowers on site saves time and money, and when all Sebert branches have that capability within the next year, Pearce says propane will become “much cheaper because you are getting a bulk service.”

Mainly, propane fuel supports Sebert’s sustainability initiative by reducing its carbon footprint. The fuel savings is a bonus.

Ongoing fuel monitoring through data collection and supporting efforts that save fuel like utilizing GPS features and alternative fuel sources can go a long way toward minimizing this critical cost of doing business. “Those (fuel) numbers are very important to the overall forecast for our company so we can react,” Pearce says.

Tuning up fuel economy

This season, Mirror Landscapes invested in its first open trailer for hauling mowers and hand-held equipment – a change from the two 24-foot enclosed trailers its Ford F-350 diesel trucks usually haul. Maintenance Division Manager Zak Bittner can’t measure the exact fuel savings from the lighter load just yet. “But I notice that our fuel is lasting a little bit longer each week,” he says. “It’s definitely helping.”

Fuel is a carefully monitored operating expense at Mirror Landscapes in Dixon, Ill. “For smaller companies, if they’re not budgeting properly or don’t have a grasp on their financial situation and fuel costs, it could put them under if they aren’t prepared for it,” Bittner says.

That’s why Mirror Landscapes budgets based on a 20 percent fuel increase each year. If there’s a spike in fuel prices, the company will consider increasing service prices. In 2014, the company spent $10,000 on fuel.

“I don’t think customers would have a problem paying $5 to $10 more per job if we had to do that,” Bittner says.

But the company has not had to make an adjustment like that so far because of careful planning. As for tracking, Bittner uses Google Maps to create tight routes for crews, then he monitors truck odometers to record mileage. He then figures in the cost per mile so jobs can be properly priced, and so the annual fuel budget can be created based on real numbers – plus that 20-percent cushion for the coming year’s potential pump price increases.

A Shell fleet credit card keeps fuel costs contained and makes it easy to see exactly how much is spent on fuel each month. And Mirror Landscapes also uses a performance chip on its trucks that optimizes fuel economy. The fuel economy programmer by SCT Performance optimizes a truck’s engine management computer. “You can buy the chip for your year/make/model of vehicle and it can increase your power or you can adjust settings where you focus on programming the fuel economy,” Bittner says.

Bittner estimates that the 1999 Ford F-350 diesel with the chip – the vehicle used on mowing routes – gets about 15 miles per gallon compared to 10 miles per gallon with other trucks without the fuel management tool.

The best fuel management advice Bittner can give: “Don’t overlook the expense,” he says. “It may seem like a small number, but it can creep up.”

Pumping up productivity

The gas prices were already close to $4 per gallon, and word was they’d spike to $4.99 during a holiday weekend a few years back. Randy Kellogg personally filled up TLC Landscape’s two trucks, which generally get about 9 miles per gallon and less when they’re hauling open trailers of landscape equipment.

“The fuel prices dropped 50 cents the next day,” Kellogg says, adding that the lesson learned is predicting fuel prices is like forecasting weather. You think you’ve got a handle on what’s to come – but you just never know.

That’s why Kellogg tries not to get too tied up in prices at the pump. There’s not a whole lot he can do about it – but he can track the expense and make sure he accounts for it in the budget. And, managing productivity is a big part of that, he says.

Kellogg prefers to fuel up trucks himself, which is easy with a two-truck fleet . The service stations and convenience stores can be a time suck for crews. “Ten minutes inside to get a snack times four people is almost an hour of work lost,” he says. “It’s about productivity.”

Kellogg runs gasoline-powered trucks rather than diesel. Most of the equipment is gas, too, except for a diesel tractor and skid-steer. Kellogg finds that gasoline provides the efficiency he’s looking for.

As for winter fueling, snow routes can be rigorous but Kellogg says that a truck will typically go through one tank of gas during a 10-hour workday, burning through 28 gallons of gasoline. “That’s not too bad,” he says.

It’s not bad when you account for the cost in the budget. “We figure on the high side,” Kellogg says of estimating gas prices. And he also keeps tabs on the monthly fuel bill.

As for fuel prices, no one has a crystal ball but Kellogg says he’s noticed fewer spikes now that there’s more domestic oil production. “We have already seen the positive outcomes of that – the influx of new oil from this country is why fuel prices have dropped,” he says.