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View Full Version : Another fuel cost thread....how to cope?


tallimeca
05-23-2008, 01:32 PM
I started to type this in another post I just made but didn't want to polute it because it didn't pertain to the topic too much, but it had me thinking how business are going to continue to adapt to the rising costs of doing business, especially with fuel costs.

Topping of tanks for customers in the service department has doubled in cost over the past 2 years. I can't raise my prices any higher then they are, just like you some of you Lco's feel. I'd feel like a shmuck sending a machine back with a quarter tank of gas. But here's my gas calculations.

If I have say.....10 full service jobs go out the door in a day, which we would drain the fuel out completely and start fresh because 99 percent of everything that comes in is rotten gas or full of water, that's 50 gallons a week. That's 200 dollars a week, which used to be 100. 400 extra a month in overhead, almost 5k a year out of my pocket.

We just set a new pickup and delivery schedule for repairs to a try and avoid wasted driving time in the same areas. We have designated days we will be in certain areas. The downside from a customer service point is we used to just schedule and go get the stuff, which would mean quicker turn around. Now it might be 2-3 days longer. Nothing I can do. I figured i'm not going to loose enough business to not do it this way. These are mainly homeowners so it's not as critical as it would be if they were trying to make a living. Only other alternative is bring the equipment to us. Why you would want to spend 20-40 dollars for us to come pick up a mower than can go in the back of your truck/suv/truck is baffling to me anyway, be we do handfulls a day.

Shipping costs are through the roof. I'm paying almost 100 dollars a machien to have a special order tractor or ZTR shipped in. It used to be 50 bucks and i would just eat it, now, i have to charge if it's something I don't stock.......and you can't stock everything. Every invoice i have come in for supplies, products has a fuel surcharge adder on it. Some of which , are illegal, but that's a whole other post.

I know the LCO's are doing the same. I'm sure you have customers that want their lawns cut fridays to have it nice for the weekend, but they are on the other side of town, where you usually are on tuesdays. Guys just don't want to make the trip because they aren't making any money, so that customer will try and get someone else. Guy was telling me an exact story yesterday. Been dealing with a customer 8 years and demands the lawn cut on thursday or friday. He called and said listen, i can't re-route 20 other lawns so i can do yours on thursday and friday so i have to do it on wednesday. She said she'd find another cutter. So be it. If it's costing you an extra 10 bucks to make the trip then it's not worth it.

A gentleman came in to buy a mower this week that was "sick of paying my landscaperlmost 50 bucks a week to cut the grass, and that's not even the cleanups, pruning ,hedges......they are outrageous"

So the conversation out of cost of doing business came up and i asked him how long they were there and how many guys to do the lawn each week and he said about a half hour. So I said to him, ok you have 2 guys making 10-12 bucks an hour, so there's 12 bucks. They probably burn close to a gallon of gas while there, not to mention the fuel to get there, so lets say another 8 bucks, there's 20. Just to be at your house cutting the lawn. I then said, now, figure in wear and tear on equipment, wear and tear on the truck, on the trailor, insurance (if they have any), registration, inspection stickers, dumping costs, advertising...... I said, it's amazing if they were making 10 bucks profit on your lawn for all of that. My honest opinion is i don't know how these guys are staying in business with all the cut throat and massive amounts of landscapers out there.

He then said hmmm, your making me think maybe it's worth it. Then of course I said DAMN LANDSCAPERS ARE SCUM, BUY THE NEW MOWER!!!! Haha, just kidding. But everyone thinks anyone in business is rich.

Everyone's cost of business is going up up up, our prices are going up as much as they can, but how many of you are taking home any more money then you were 2 seasons ago? Not many i'm sure.

I just got word that one of the big manufacturers in the equipment world is going up 6 % on their prices as of June 1st..........

I'm curious as to how your costs are going up. I'm sure the costs of harvesting seed/sod has gone up. Stone masonary has had to increase with the costs of quarrying it increasing.

We are obviously in a recession with a major case of inflation.:dizzy:

I can't believe how many yards i drive by that look like crap that used to be all nice. People are only spending money on the necessities. Apparently the yard is not one of them. We sell Scotts lawn products and our numbers are way down as far as fertilizer and seed sales go.

I don't see this going backwards, so the challenge is how can we turn more of a profit to help our employees and ourselves deal with the rise costs of living, without raising prices to cover overhead increase?

I don't see any way around it. So if every busineses raises prices on good/services, that's means everyone's cost of living increases again.

It's going to get ugly.

Sorry for the BLOG..........Just thinking out loud this morning.

larryinalabama
05-23-2008, 01:47 PM
Ive had to drop a couple of far away accounts, and I want to go full time but Im really not sure where this gas thing is headed, gas went up another >10 just today, wheres the end?

tallimeca
05-23-2008, 02:32 PM
i'm guessing that the price of gas is going to settle damn 5 bucks a gallon. Most other countries, that's what it is.

buzzz427
05-23-2008, 04:19 PM
gas just hit 4.10 here we'll be lucky if it only goes to five bucks its killing me

doubleedge
05-23-2008, 05:29 PM
If congress allowed oil companies to drill in Alaska and off the coast, we would be sitting at aound $2 per gallon. Remember that this year when you are voting :usflag:.

Sweet Tater
05-23-2008, 06:54 PM
its not all because of the amount of oil, but there are not enough refineries to make the gas, thats the big problem.
its at 3.81 here today. almost 40 bucks just to fill the mower :cry::cry:

Damian
05-23-2008, 08:16 PM
If congress allowed oil companies to drill in Alaska and off the coast, we would be sitting at aound $2 per gallon. Remember that this year when you are voting :usflag:.

If the oil companies were allowed to pump as much as they wanted to from the Alaskan reserves, China would just have that much more oil to use. Well, them and India. Prices here would not drop a cent - unless a big announcement were made - and even then, they would quickly go back to what they were as OPEC adjusted their output. End result? The oil companies would make even more billions of dollars profits per quarter.

nosparkplugs
05-23-2008, 09:21 PM
Just filled up my Cummins today about $135.00, ouch. The cost to fill my mowers is really getting expensive. while most would think $135.00 to fill a diesel truck is crazy. I think my gasoline ZTR air cooled engines are gas guzzlers more so than the Cummins. One good thing about diesel no one wants to steal it

Frue
05-23-2008, 09:46 PM
well as the owner you must start doing more work yourself! working longer, routing tighter, and watching everything.

puppypaws
05-23-2008, 09:54 PM
If the oil companies were allowed to pump as much as they wanted to from the Alaskan reserves, China would just have that much more oil to use. Well, them and India. Prices here would not drop a cent - unless a big announcement were made - and even then, they would quickly go back to what they were as OPEC adjusted their output. End result? The oil companies would make even more billions of dollars profits per quarter.

This is the main problem, you hit it right on the head!

China, Japan and India have America's money because our stupid government allowed it to happen. They are competing in the same market we are but have the money to buy all the oil; they need or want. The King of Saudi Arabia let Bush know rather quickly they were satisfying their customers and would not increase output for America.

Think about it for a moment, you are an oil producing country, and you have several tanker ships full and ready to go to the highest bidder. America needs it very badly but China is in the market for a purchase, now who do you suppose would win the bidding war. China will buy the oil with money; they have generated from stupid Americans. I believe everyone in a government office of any type should be taken out and never allowed to be involved in any US business again. To kill cancer you must destroy every cell and this is the only way our government will ever be useful again, get rid of the problem people.

fastcat
05-23-2008, 09:55 PM
it cost 135 to fill up my gas burner you think congress cares hell no. me and an old timer were talking about it the other day and his son in law works for the gas people and he says there is enough gas in the us to out last any of us but the enviromentolist keep us from drilling and it takes ten years to make a refinery. **** congress is what i say.

KGR landscapeing
05-23-2008, 10:10 PM
to bad all the guys and gals who know how to run this country are bustin there butts everyday. We put donw 25 yrds of mulch today so that was 3 trips to the place to get it. Are boss drives like an Butt and dosent even think about it, now us we save as much as we can. I think it seems to hurt us more then him.

topsites
05-23-2008, 10:20 PM
So if every busineses raises prices on good/services, that's means everyone's cost of living increases again.

It's going to get ugly.

I seen that months ago, what glees me to no end is the inability of other companies to keep up with my prices, you take that however you want but I am filling my schedule at a fairly satisfactory pace. My customer's lawns don't look like crap, my customer's demands are few, my customer's payments are on time.

Unfortunately I am no genius and because of that in the terms of the compromise I face the same challenge as you do:

The fuel isn't coming down.
The roads are deserted, folks are behaving for some part, but it is not coming down.
Instead it keeps rising, I'm looking at $4.199 a gallon right now and it was just 3.99 a week ago.
Because the message still hasn't got across entirely, I just watched a line in a drive-through 10 or 15 cars deep...
All of them idling along like cows in a herd, burning petrol...
I parked the truck and shut it down, then went inside, it was empty.
Does this clarify things?

Let me explain it:
I'm not sure who all is guilty, so let's just say WE have burned petrol for too long without a care in the world, and now we pay the price. The cost is going to continue rising at a mildly but ever increasing pace. I can not foretell the future but as things stand we will see 10 and 20 dollar and 100 dollar and more per gallon fuel, until such time...

When folks can't take it anymore, change might happen.
War might happen.
Disease and famine could happen.
Or, we might adapt and overcome.
But, where do we get the ENERGY to compensate for 100 million barrels of petrol a day?
That is, stop amazing me with the stories about perpetual or free energy, nothing is free.
Corn isn't free, solar and wind power isn't either, hybrids cost in the compromise, too.
Some to most proposed solutions are all fine and dandy in theory...
Until one considers we NEED the energy equivalent of 100 million barrels of petrol a DAY!
In short, everything requires petrol, one way or the other.

The only good news is there's fuel at the pump, always, anytime.
No long lines, no nonsense, pay and fill'er up and go, in that order.

So as to the answer to your question?
I have no clue either.

Here's the one thing helps me out:
Do things one small step, and one day at a time.

milo
05-23-2008, 11:41 PM
no the problem is we need to make gas out of something other than oil... what u ask? sugar just like brazil does 1.00 a gallon runs better, cleaner and dont got to rely on other countrys for it.
all our vihecals will run off it now mowers with carbs will need nothing. efi's will need new o2 sensor..

NINER
05-24-2008, 12:07 AM
This is the main problem, you hit it right on the head!

China, Japan and India have America's money because our stupid government allowed it to happen. They are competing in the same market we are but have the money to buy all the oil; they need or want. The King of Saudi Arabia let Bush know rather quickly they were satisfying their customers and would not increase output for America.

Think about it for a moment, you are an oil producing country, and you have several tanker ships full and ready to go to the highest bidder. America needs it very badly but China is in the market for a purchase, now who do you suppose would win the bidding war. China will buy the oil with money; they have generated from stupid Americans. I believe everyone in a government office of any type should be taken out and never allowed to be involved in any US business again. To kill cancer you must destroy every cell and this is the only way our government will ever be useful again, get rid of the problem people.

THAT IS THE MOST PHILISOPHICAL ANSWER FOR EVERY F -UP IN THIS WHOLE COUNTRY. REMEMBER 911 DID CHINA SAY HERES SOME MONEY? BUT U.S. SAID HERE HAVE SOME. WE ARE O.K WE DONT NEED THE MONEY THE OTHER DAY BECAUSE THE GROUND WAS SHAKING.:usflag::usflag::usflag::usflag::usflag::usflag::usflag::usflag::usflag:

DLCS
05-24-2008, 12:18 AM
See thats what i don't understand. We are borrowing money from China and yet China has a natural disaster and we are giving China money? WTF, wake up people! Why are we caterign to these comunists, stop buying their crap, stop borrowing money from them, stop giving them money. They are and have been preparing for war with us. Our economy is going to hell and we are buildingtheir thriving economy. Whats wrong with this picture.

puppypaws
05-24-2008, 12:35 AM
See thats what i don't understand. We are borrowing money from China and yet China has a natural disaster and we are giving China money? WTF, wake up people! Why are we caterign to these comunists, stop buying their crap, stop borrowing money from them, stop giving them money. They are and have been preparing for war with us. Our economy is going to hell and we are buildingtheir thriving economy. Whats wrong with this picture.

AMEN, PASS THE COLLECTION PLATE, AMERICA IS ON WELFARE!

nlminc
05-24-2008, 07:39 AM
See thats what i don't understand. We are borrowing money from China and yet China has a natural disaster and we are giving China money? WTF, wake up people! Why are we caterign to these comunists, stop buying their crap, stop borrowing money from them, stop giving them money. They are and have been preparing for war with us. Our economy is going to hell and we are buildingtheir thriving economy. Whats wrong with this picture.

Amen!

I think this has been going on for a long time...since the 70's? I was clearing some stuff out of my basement and found an old Boston Bruins sweater from the 70's. I grabbed the tag thinking I was going to see "made in the USA" but instead it said "Made in China"!

I would love to stop spending money on China....but tell me how! You really can't go anywhere to shop without finding the items were made there.

k911lowe
05-24-2008, 07:57 AM
If congress allowed oil companies to drill in Alaska and off the coast, we would be sitting at aound $2 per gallon. Remember that this year when you are voting :usflag:.
if companies would come up with an alternative fuel we would not be drilling anywhere.this bullshit happens all the time.the price of gas goes up and everybody is going to do something about. i am 64 years old and i haven't ever seen anyone do squat except lip service about fuel costs.never.what makes you think its gonna be any different no matter who you vote for.they're still gonna do nothing but lip service,like the millionaire congressman grilling the millionaire oil execs.gimme a break.

puppypaws
05-24-2008, 08:06 AM
if companies would come up with an alternative fuel we would not be drilling anywhere.this bullshit happens all the time.the price of gas goes up and everybody is going to do something about. i am 64 years old and i haven't ever seen anyone do squat except lip service about fuel costs.never.what makes you think its gonna be any different no matter who you vote for.they're still gonna do nothing but lip service,like the millionaire congressman grilling the millionaire oil execs.gimme a break.

Amen again, I like that JD avatar!

You are older and have seen how our country has been ruined by politicians. The oil and insurances companies have more power than the government, big money still rules.

jkilov
05-24-2008, 09:04 AM
The oil and insurances companies have more power than the government, big money still rules.
No doubt that gas prices are fictionally hyped up.

Fact is when I looked at the sheets gas makes up a good 10% of expenses. If it goes up to 10$/gall it'll be like over 20%. Bad but no disaster.

I'm more worried about employee wages, dealer parts and labor charges going up.

milo
05-24-2008, 09:57 AM
if companies would come up with an alternative fuel we would not be drilling anywhere.this bullshit happens all the time.the price of gas goes up and everybody is going to do something about. i am 64 years old and i haven't ever seen anyone do squat except lip service about fuel costs.never.what makes you think its gonna be any different no matter who you vote for.they're still gonna do nothing but lip service,like the millionaire congressman grilling the millionaire oil execs.gimme a break.

tell it how it is. your 1000% right. just trying now to make us feel like 3.00 a gallon is normal and cheap.. when should be 1.50

puppypaws
05-24-2008, 11:08 PM
No doubt that gas prices are fictionally hyped up.

Fact is when I looked at the sheets gas makes up a good 10% of expenses. If it goes up to 10$/gall it'll be like over 20%. Bad but no disaster.

I'm more worried about employee wages, dealer parts and labor charges going up.

Gas went to $4.00 a gal. here today. You are saying gas made up 10% of your expenses, you will find out it is making a bigger impact than 10%, all the other things you are worrying about are all related.

Oil has gone up to the point our government is taking food (corn, which feeds your meat and dairy animals) and making fuel. This has a rebound effect and causes the cost of living as well as all the things you mentioned to go up, up, up. You are paying the extra cost of fuel in everything you purchase.

Drew Gemma
05-24-2008, 11:29 PM
be efficient we bought a dump trailer so we can haul almost 20 yards in one trip we take more guys out less days per week they landscape 3 properties a day 3 days a week or more all new mowers are efi engines huge savings we are looking at changing rear ends in trucks and putting intakes and exhaust systems on mowing crew works 7 to 7 until route is done for week we are saving on drive time and cost basically if we leave we have a 12 hour day we are basically getting it done in 4.5 days. I am also looking at hho a fellow around here runs his s10 with that and gas he said his mpg are up 25 percent. I am also gearing up to cut a whole day of mowing off the route because profit margin is terrible also we are taking every job we can close to home

jkilov
05-25-2008, 11:12 AM
You are saying gas made up 10% of your expenses, you will find out it is making a bigger impact than 10%, all the other things you are worrying about are all related.
Yes I know what you're trying to say. It makes up 10% direct cost and who knows maybe 30% total as gas price is present in anything you buy or hire.


Oil has gone up to the point our government is taking food (corn, which feeds your meat and dairy animals) and making fuel. This has a rebound effect and causes the cost of living as well as all the things you mentioned to go up, up, up. You are paying the extra cost of fuel in everything you purchase.

Do farmers now get twice the price for corn they sell? Think they're rich or something? NO! You should know that first hand. Has the percentage of ethanol in fuel risen? NO! America is'nt densely populated and can make all the corn, wheat, barley or w/e it needs. If the price has gone up SOMEONE is making money payuppayuppayup and it sure hell ain't the farmer.

Gas prices in the UK have gone over $9 /gall. Why? TAXES, THAT'S WHY! What do they not get oil from the same place? And if we continue to cry and talk about gas prices all the time, all we're doing is adding self-justification to a global SCAM!! and before long we'll be in the same spot as those tea-guzzlers.

puppypaws
05-26-2008, 12:07 AM
Yes I know what you're trying to say. It makes up 10% direct cost and who knows maybe 30% total as gas price is present in anything you buy or hire.



Do farmers now get twice the price for corn they sell? Think they're rich or something? NO! You should know that first hand. If the price has gone up SOMEONE is making money payuppayuppayup and it sure hell ain't the farmer.



Yes, I definitely know because I have been farming for over forty years. This year I will make the most money farming; I have ever made if a hail storm does not come and cut my wheat down and the soybeans planted after the wheat is a normal crop. I will start cutting wheat around June 10 and it looks to have an easy potential of cutting 75 bu. per acre. I have pre sold the crop for over twice the money I have ever sold wheat for in my life. I also have soybeans pre sold at over twice their average price for the last 20 years.

Now, to give you a little education on why I will make more money than the largest majority of farmers in the country is for these reasons. I am 100% no-till and have been for 22 years. This means I spend less money for fuel because I spray a burn down chemical on wheat, plant, spray liquid nitrogen and a broadleaf herbicide in one pass, then harvest. I will plant soybeans directly into the wheat stubble after the combine finishes, then at 28 days I will spray Roundup directly over the top and come back with the combine at harvest time. I have been using my own poultry litter for fertilizer (which is 10 times better due to all the minor elements) for 20 years and bought it from other poultry growers prior to that time. This calculates to me having 13.80 per acre for fertilization of the wheat crop and the exact same amount per acre for the soybean crop. I would be spending $125.00+ an acre if I had to buy and use commercial fertilizer.

I can farm as cheaply as anyone in America which relates into the most profit.
The statement you made about farmers not making money does not relate as to the price of commodities being extremely high at this time, and it certainly does not relate to my operation. I expect to make the highest profit margin in 2008 that has ever been made in my operation.

What you have read here is not a guess or opinion but facts coming from real numbers and calculations.

Jason Pallas
05-26-2008, 06:59 AM
Our government was asleep at the wheel and now we're screwed. The arab nations are strangling us with high energy prices - and buying up corn and rice futures with the profits. So, now we're really screwed as they will soon own our energy and food. In addition, this tactic has forced many US companies into bankruptcy - the arabs then buy the devalued and bankrupt company at a 90% reduced price. Look for our food, energy and business to soon be completely owned and dependant on the middle east. Thanks Bush. The only way we can avoid this is to pass a ethanol / methonal mandate that says EVERY car sold must be flex fuel capable. Both these fuels are easily produced domestically and renewable. They would cost about $2 gallon and it would immeidately drop oil prices as it would force oil/gas to compete (which is does not have to now). There is a bill before congress to do this now. Contact your local US Rep to voice your support - otherwise we all are totally screwed.

Frue
05-26-2008, 07:16 AM
AMEN, PASS THE COLLECTION PLATE, AMERICA IS ON WELFARE!

you guys are not figuring out the real problem here!!!! Remeber the last time we printed a ton of money and extended everyone credit it was called the roaring twentys! Something happend at the end of the twentys?

The Federal Reserve is the real problem here!

Frue
05-26-2008, 07:22 AM
Yes, I definitely know because I have been farming for over forty years. This year I will make the most money farming; I have ever made if a hail storm does not come and cut my wheat down and the soybeans planted after the wheat is a normal crop. I will start cutting wheat around June 10 and it looks to have an easy potential of cutting 75 bu. per acre. I have pre sold the crop for over twice the money I have ever sold wheat for in my life. I also have soybeans pre sold at over twice their average price for the last 20 years.

Now, to give you a little education on why I will make more money than the largest majority of farmers in the country is for these reasons. I am 100% no-till and have been for 22 years. This means I spend less money for fuel because I spray a burn down chemical on wheat, plant, spray liquid nitrogen and a broadleaf herbicide in one pass, then harvest. I will plant soybeans directly into the wheat stubble after the combine finishes, then at 28 days I will spray Roundup directly over the top and come back with the combine at harvest time. I have been using my own poultry litter for fertilizer (which is 10 times better due to all the minor elements) for 20 years and bought it from other poultry growers prior to that time. This calculates to me having 13.80 per acre for fertilization of the wheat crop and the exact same amount per acre for the soybean crop. I would be spending $125.00+ an acre if I had to buy and use commercial fertilizer.

I can farm as cheaply as anyone in America which relates into the most profit.
The statement you made about farmers not making money does not relate as to the price of commodities being extremely high at this time, and it certainly does not relate to my operation. I expect to make the highest profit margin in 2008 that has ever been made in my operation.

What you have read here is not a guess or opinion but facts coming from real numbers and calculations.

no offense puppy but farmers are not making out on the deal! The price of fert is over doubled also creating a shortage of potash. Last year it was 350 a ton for bulk. Now it is upward 650-750 a ton for fert. How about the price of fuel? Maybe you have it figured but farmers are once again getting boned!

puppypaws
05-26-2008, 10:14 AM
no offense puppy but farmers are not making out on the deal! The price of fert is over doubled also creating a shortage of potash. Last year it was 350 a ton for bulk. Now it is upward 650-750 a ton for fert. How about the price of fuel? Maybe you have it figured but farmers are once again getting boned!

You being in Pennsylvania, can you tell me if people have gone into no tillage farming or do they still work the land up before they plant? It really blows my mind people are just starting to realize the benefits of no-till farming in the midwest and most of them still burn a tremendous amount of fuel going over and over land in preparation for planting. My father and I started some no-till corn planting in the 60's and I worked my way into 100% no-till because I had no problem seeing all the advantages.

I am familiar with all prices associated with farming, and as you can see I have been saving fuel for many years through no tillage and fewer trips over the field. I have at the same time continually improved the productivity of my land through no-till and the use of poultry litter.

Like I said, most farmers are not fortunate enough to manage the way I do and this makes a tremendous difference in profit. You having an idea of fertilizer cost makes me wonder if there is any farming background in your history.

KGR landscapeing
05-26-2008, 02:35 PM
You being in Pennsylvania, can you tell me if people have gone into no tillage farming or do they still work the land up before they plant? It really blows my mind people are just starting to realize the benefits of no-till farming in the midwest and most of them still burn a tremendous amount of fuel going over and over land in preparation for planting. My father and I started some no-till corn planting in the 60's and I worked my way into 100% no-till because I had no problem seeing all the advantages.

I am familiar with all prices associated with farming, and as you can see I have been saving fuel for many years through no tillage and fewer trips over the field. I have at the same time continually improved the productivity of my land through no-till and the use of poultry litter.

Like I said, most farmers are not fortunate enough to manage the way I do and this makes a tremendous difference in profit. You having an idea of fertilizer cost makes me wonder if there is any farming background in your history.

Puppy paws i give you a ton of credit and i think most people here still till farm and thats really labor intensive. But hey man if what your doing works and its cost effective then more power too you. i think you way would be easyer.