CLEVELAND – According to the American Automobile Association (AAA), on March 3, the national average for a gallon of gasoline was $4.17, a record that broke the previous record of $4.11 per gallon, which existed since July 2008.
The culprit was the surge in world crude oil prices, the result of Russia’s invasion of Ukraine.
The pain at the pump is even more acute for owners of route-based businesses, like pest control companies. PCT met with several PCOs from various parts of the country to find out how they have been affected and how they are coping.
OVERLOAD OR NOT? Whenever gasoline prices skyrocket, the great debate between PCOs ignites over whether or not to add a fuel surcharge to their customers’ bills.
Bill Cowley, co-owner of Cowley’s Pest Control, Farmingdale, NJ, said his company has never added a fuel levy in 31 years in business, “but all options are on the table right now.”
Similarly, Doug Longfellow, president of NaturZone, Tampa, Florida, said, “We’ve thought about it but aren’t moving forward yet. But we just implemented our biggest price increase ever. Keep in mind that we are primarily a commercial [pest control business].”
On March 7, PCT asked its LinkedIn followers “Given rising gas prices, are you considering adding a fuel surcharge to your customers’ bills?” and 64% answered “no” while 36% answered “yes”.
In California, where gasoline prices have traditionally been among the highest in the country, Jim Harmon, owner of California Pest Management, La Verne, Calif., said, “We’ve been prepared for rising fuel costs with a little extra during those times when gas is up about $7 a gallon.
Adding an extra increases your profit and recoups some of the fuel cost; however, doing so may upset your customers.
“Customers go mad when they see this item,” said Carrie Campbell, owner of Hatfield Pest Control, LaPorte, Ind. “We’ve done that in the past and it just didn’t work for us. It especially upset our [elderly customers].”
One of the problems with surcharges, according to PCOs, is that customers don’t understand that a surcharge will be removed or reduced when gas prices drop. If you add a surcharge, it’s important to send a letter or email to customers explaining the charges, the PCOs said.
Most PCOs contacted by PCT responded as Glenn Matthews III, owner of Modern Exterminating, Columbia, SC, when asked what action he was taking instead of an additional, “Raise prices across the board,” did he declare.
And, as Macedonia, Ohio-based TNT Exterminating President Mike Grace noted, “there are other issues that come with costs as well. Let’s just increase them.”
REVIEW OPERATIONS. In addition to adding (or considering adding) a fuel surcharge, soaring gasoline prices have caused PCOs to re-examine their operations in several key areas.
Campbell says his company immediately saw the benefits of using routing software in terms of cost savings and “we’re looking into it more closely. We don’t send our guys from one community to another. Let’s do all our work in one community and then move on so we don’t back down and waste fuel.
Similarly, Matthews said of using his company’s software routing optimization tool, “We can just try to do a little tighter routing.”
Cowley said his company learned the lesson about smart routing years ago and “we’ve been routing like there’s a gas shortage for over 20 years. We have a full-time routing manager who reviews all of our routes daily/hourly with a focus on eliminating windshield time.
For companies that are growing rapidly and adding positions, rising gas prices can factor into staffing decisions. “We are in the process of hiring or promoting a routing manager,” NaturZone’s Longfellow said.
DRIVER BEHAVIOR. One thing that all the PCOs we spoke with agreed on was the need to reinforce safe and smart driving habits.
“Each month, our managers have a KPI meeting with each technology. Safety and driving behavior are part of the KPIs,” Longfellow said.
Cowley said his company emphasizes safe driving through safety technician training. “We also use driver behavior monitoring. We produce a report every week and share the results with all our technicians. Speeding, accelerating too quickly, and idling are all energy-draining driving behaviors and safety scares. Feedback helps us identify our aggressive drivers and retrain them accordingly. The end result is defensive driving that saves money on gas, vehicle maintenance and insurance premiums.
Harmon said his technicians “monitor air pressures and have changed their driving habits for maximum fuel economy.”
Several PCOs said they urged their technicians not to make unnecessary trips. “Eat lunch on the way to your next stop. Be smart and conserve fuel as best you can,” Matthews said.
Here’s what some of PCT’s Facebook followers had to say about adding a fuel surcharge.