Saturday, March 15, 2008

Fuel Price Update

Well, I have to unload here a little bit. I just came back from filling up our Jeep at our local gas station. When I pulled in there I thought I was seeing things when I looked at the diesel fuel pump prices. Now, this is a little country gas station, I like doing business there. You know, keep it local and all that. But, for some reason they don't have the first number posted on the sign above the pumps. The only thing they have showing on their sign is the cents part. So the day I saw that they had gone up to $4.14 9 all they have showing is 149 . Often I joke that it's dollars not cents posted up there. I'll say, "it's $14.90 a gallon" or whatever. Anyway, I can't imagine why they don't post the dollar amount, I guess they figure people are smart enough to figure it out. Back to my point! When I looked at the sign I saw .29 9. I thought I was seeing things. I rubbed my eyes. The diesel fuel jumped up .15 cents a gallon and is now $4.29 9/10 per gallon. Unbelievable! It just keeps getting better and better.

I'm not really stressing about it, well,,,, maybe a little. I need to just take a couple deep breaths..............., ................ OK,,,, all better.

If you are new to our blog, I should mention that we have our own rural garbage route here in the north woods. Currently I put on about 500 miles a week in a mini 6 yard compactor truck. It has an Isuzu diesel engine. Compared to the big national and international garbage companies we have a pittance of customers. I always say, we pick up the crumbs they leave behind. Last year we broke the 300 customer mark for the first time. Which is nothing for the big boys. A larger hauler (but not one of the big boys) I know of has 500 stops in a small town to our west and they do it all in 8 hours in a large full sized garbage truck. We pick up ours in 4 days. It's pretty spread out. Just under 30 hours a week. The fuel prices have been an issue for us since September 11, 2001. We have to keep raising our prices to keep up with the fuel costs. Just before we bought our mini-compactor truck we raised our prices by nearly 20 %. We explained to people that we desperately needed the truck and between that and the fuel, it had to be, if we were going to stay in business. We were amazed and humbled that we only lost a couple people.

That was over a year ago and fuel prices continue to go through the roof. But, we have kept a hold on our price. It seems like we just raised it and I know people are still feeling it. Just recently one of the big boys pulled out of residential garbage in our area and we picked up about 50 more customers from that. That helps quite a bit actually and we started to breath a little easier. But, I guess we aren't supposed to get too comfortable because now one of the other big boys, Violia an international company, is trying to move in on our territory. They are under cutting us by quite a lot. We are losing customers to them now. I guess they want to capitalize on the void from the other big hauler and are low balling their price to take over. We new ahead of time that we might be in trouble because Violia has been sending out advertisements and we have gotten three of them in the past couple months.

Kelli and I have been talking about lowering our price to try and compete but, these fuel prices are going to kill us. We actually need to raise our price not lower it. So tonight on my way back home from the gas station my wheels started whirling. I think we might have a trick up our sleeve to compete with the big boys and not have to lower our price. I really don't want to say what it is just in case someone from there happens to find this blog from doing an Internet search, from me using their name here on this post. But, it has something to do with home court advantage, I'll say that much.

I really don't know how long we'll be in this business. I never thought I'd be doing anything even remotely like it when we came here. Even though I don't do it "full time" it still seems like it's taking away alot of my time from what we are trying to do here. We've been working towards being able to hire a driver. That is a huge chunk of the profits but, it would still be worth it even if we only wind up with a little bit, especially if we can make some money from this years farming endeavors. I have a helper now, a good friend, he's been helping for one year, a driver wouldn't be that much more of a cost. However, this business has been a blessing in a number of ways. For one, it provides a small but, steady income. And it has put us in touch with the community, which we love. We care about our neighbors and do enjoy serving them, even if it is picking up their trash.

Well, I guess I've sufficiently unloaded. I wouldn't be surprised to see $5 a gallon before long, the way things are going. I heard it has gone over that in California. I remember on 9-11 there was rumors that gas was going to be over $5 dollars and there were lines at the pumps. Our little local station even ran out of gas and closed early. It was surreal. Now people seem to roar up and down the highway like it's nothing. Oh, I'm sure they're feeling it, but still it doesn't seem to slow them down. I wonder what it's going to take before they do.

Until Next Time

4 Comments:

Blogger Herrick Kimball said...

Russ,

I'm sorry to hear of the difficulties you are experiencing because of high fuel prices. I live in a rural area and, just recently, the primary trash hauler here (a big outfit) has discontinued service to my town. There aren't enough people to justify the cost. So some people want the town to coordinate trash pickup and include the service in their taxes. The town board (which I am on) doesn't want to get into this, but most other towns around us do it. If I had sufficient land for it, I would get a big dumpster and set up a trash dumping (for a fee) facility for the town reidents. People could come dump and pay and we'd be in business. I'd have the big trash company get the dumpsters on a regular basis. Is it possible that people can come to your place with their trash at certain times? Or can you be at certain locations on certain days? Is that sort of thing done?

Best wishes,

Herrick Kimball

11:51 AM  
Blogger RL said...

Hi Herrick,
Thanks much for the input! Yes, that is exactly what we are thinking of doing. We might offer that option to our customers who want to save money though I'm sure quite a few will still like the convenience of getting their garbage picked up at their place. I'm actually kind of excited to consider staying in one spot (home) and having them come to me. Then when I get a load I can run it to the land fill.

And the idea of being at a certain location on certain days is doable too. I know a small hauler from another town who does that too, one day a week.

When I get a chance I'll be crunching some numbers to see if we can make it profitable for a reasonable price.

Thanks again! It's nice to hear from another perspective.

2:47 PM  
Blogger Haymaker said...

RL,
I'm a new blog reader that drifted in from Herrick's pages. Regarding the squeeze in trash hauling, I very humbly encourage you to be very open with your customers and the challenges you have. I know I would respect that from a service-vendor.

Regards,
Brian

7:04 AM  
Blogger RL said...

Brian,

Welcome and thank you for the advice!

I heartily agree with you.
We have done that in the past, like the time we needed to raise the rates in order to get a new truck. We were humbled by how understanding most people were.

This too is a time when we need to be open about the challenges we are facing.

By the way, you are one of the closest to us, geographically speaking, who has ever commented on this blog. I only recall one other person from Wisconsin.

Russ

11:07 PM  

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