An Industry Goes to Work to Beat Back Fuel Costs
NORWALK, Ohio — With gas prices soaring to record levels, security contractors that operate vehicle fleets are under increasing pressure to pass added costs to customers while also searching for more economical strategies of doing business.
Identifying and implementing mitigating solutions to skyrocketing fuel costs are becoming evermore necessary to fend off a ruthless assault on many a company’s bottom line, industry professionals report.
“The gas is killing us. It’s affecting everything across the board,” says security industry veteran Bob Beck, proprietor of Norwalk, Ohio-based R.J. Beck Protective Systems Inc. The fuel dilemma is presenting new challenges to the business model that security contractors never had to account for in the past 30 years, Beck says. “A tank of gas today can be $100. You can’t tell your salesman to go out and knock on doors and cold call all day. You have to do things smarter.”
SSI recently asked readers how their companies were coping with rising fuel costs. Fifty percent say they are maximizing trips into the field by hitting as many stops as possible during each dispatch. A similar percentage say they are passing costs onto customers.
Beck folds a projected increase in gas expense into the total cost of doing business for each job he bids. “This is no gas surcharge. When we go in to bid something, we have to come up with a higher cost to do business,” he says.
Other companies are choosing to append a surcharge that appears as a line item on the client’s bill. Pat Egan, president of Select Security of Lancaster, Pa., has been experimenting with such a cost for more than a year. He started the adjunct charge at $10, backed it down to $5 for a spell, and now it’s back to $10.
Egan says his company collected about $55,000 in gas surcharges in 2007 and is on pace to top that in 2008. But that’s not all he’s doing to fight spiking fuel costs. Select Security recently purchased nine Chevy HHRs for its service and installation techs, replacing a fleet of gas-guzzling vans. “We have cut by 50 percent our existing fuel expense on service, inspection and testing calls by putting those guys in 30 miles per gallon vehicles instead of 15 miles per gallon vans,” Egan says.
The HHR is a retro-styled compact station wagon with roomy cargo capacity for its size. Not as spacious as the old-school vans so ubiquitous in the installation business, but as
Select Security learned, those vans are often overkill. During his company’s investigation into finding ways to lower its fuel bill, Egan discovered excessive vehicle weight could be slashed by limiting what his techs were hauling each day. Gas mileage improved immediately.
“What we discovered when we began changing vehicles out is these guys were like rat packs,” he says. “They hold on to way more items than they need to carry.”
Gone are the days when an installer would drive around with several complete panel kits.
“He didn’t need those, although that was the easiest way to get the boxes in his van,” Egan says. Now the company unwraps the kit boxes and only uses bubble-wrapped packaging for the components necessary in a given installation. “We can get 10 different control panels in one plastic bin and it’s much, much lighter. They don’t need to be carrying the metal cans.”
Egan’s other no nonsense methods to lessen vehicle weight on his new fleet include doing away with racks to carry 24-foot ladders. If a tech does need the extra-long ladder, a standby van can be checked out or a runner driving a high-mileage vehicle can deliver it directly to a jobsite.
“It’s a combined effort. You can’t just go out and buy these new vehicles. You have to have an educational program in place for your technicians as well,” Egan says. Matt Ladd, president and CEO of The Protection Bureau, based in Exton, Pa., also recently began switching technicians out of vans and into the Chevy HHR, thereby doubling his gas mileage. Ladd also instituted the use of a GPS system on his fleet, which is commonly used as a management tool to watch for assorted vehicle abuse. “But we also use it for efficiency,” Ladd says.
GPS is integrated with business management software, allowing the company to dispatch a service call based on which tech is best suited for a given job rather than solely on geographic proximity. “We wanted to optimize the use of our vehicles because we realized they were going all over the place. There wasn’t any real organization,” he says.
Still another method of cutting gas consumption that is becoming more popular among installation brethren — Ladd, Beck and Egan included — is putting technicians on a 10-hour, four-day workweek. Companies are able to idle 75 percent or more of their fleet for up to three days a week, which is resulting in considerable savings. Dealers are also learning the 4/10 schedule is good for morale; employees are tickled to have a three-day weekend.
“This isn’t rocket science,” Egan says. “Everybody just has to think about how to conserve.”
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