Skyrocketing fuel costs are one of the biggest burdens to any business that depends on motor vehicles to get the job done. Gas is hovering around $4 a gallon this summer, and diesel fuel is already past that all over.
What’s a PRO to do to stay on top of this direct bite out of the bottom line? The fact is, there’s no way to run a portable sanitation business without vehicles, so you can’t step over this intensifying challenge. One way to address the rising costs is to figure out ways to bring down fuel consumption.
Larger operations can afford to do a bit of belt-tightening, since there’s always some waste to be identified and eliminated through route consolidation and efficiency. But smaller companies jostling for position in their markets are generally running lean as it is. These two PROs explain the holding pattern they’ve been forced into as they deal with the rising cost of a necessary commodity to stay in business.
Michael Johnson Sr. manages Del Zotto Products, which fields about 45 restrooms, with about 70 percent of those serving the construction trade and the rest deployed for tourist attractions and a few special events. This prime tourist destination suffers from the same high fuel prices as we do in the United States. Due to its relatively small geographic market, though, PROs find themselves in the unenviable position of having to remain seriously competitive, meaning they aren’t inclined to pass higher fuel costs on to their customers.
“We’re eating gas price increases right now,” says Johnson, noting the stiff competition for customers. “Sooner or later, everyone will have to start passing on those higher prices, or no one will be profitable.”
For now, Johnson keeps a tight rein on dispatch, with an eye toward scheduling denser routes. “I try to get in as many stops on each run as possible,” he explains, “to make each one as efficient as we can get it.”
Jerod Bostic’s company deploys 15 portable restrooms, primarily to construction contractors. He is in the process of growing his business from a part-time gig to a full-time profession. High fuel costs are definitely not helping the speed of that expansion, as they take a direct bite out of his profitability.
Because he has just the one small route, there’s little Bostic can do to consolidate trips or rearrange runs to build more efficiency. So he’s feeling the pressure.
“Right now, I’m having to eat those increases,” Bostic says. “So far, no one (in our area) has passed those charges on to the customer, but I’m hoping in the near future somebody will.”
Bostic doesn’t want to be the first to set that precedent and make himself a target for contractors who would undercut the competition. However, if any of his competitors makes that move, he’ll happily follow rather than continue to shoulder the entire burden of rising fuel costs.
