Fleet Management

Hybrid Vehicles Inspire HVAC Contracting Efficiency

Contractors Look to Shrink Travel Costs with Higher Fuel Efficiency

November 11, 2013
Trans

Traveling from job to job, HVAC companies log lots of miles on the road. While more miles typically means more work, it also means higher gas and maintenance costs. To offset these added expenditures, many business owners are considering a more efficient fleet.

Maintenance Per Gallon

Matt Marsiglio, service manager, Flame Heating, Cooling & Electrical, Warren, Mich., refreshed his fleet in June with 45 new trucks, which increased the company’s average mpg from the 10-11 range to 12-13. Although it may seem insignificant, he said, the savings have already begun piling up.

“Fuel cost is one uncontrollable we deal with,” Marsiglio said. “We know when our materials are going to increase because our suppliers will warn us. We don’t know when fuel increases, so when we’re doing pricing, it’s tough to speculate. If we can control two miles per gallon times 45 trucks times 20,000 miles a year, it starts adding up to real money.

“It was definitely financially driven, but part of it was we use Ford vehicles, and they’re going to be changing their vans, so we wanted to let the new styles work their way in.”

Eric Knaak, vice president of operations, Isaac Heating & Air Conditioning, Rochester, N.Y., said his company has made use
of hybrid vehicles for the last few years — but only for the home-performance aspect of the business.

“It seemed to tie in really well with home performance, not to mention it’s a good way to market efficiency,” Knaak said.

Unfortunately, it’s just not feasible for Isaac to convert its entire fleet of 165 vehicles to hybrids quite yet, Knaak said.

“It’s not necessarily an option with all of our vehicles, but we are always looking for those cost-savings opportunities,” Knaak said. “We need to be able to do what we have to do, carry what we have to carry, and meet all those needs. In the future, I definitely see more hybrid vehicles in our fleet.”

Saving Dough

GPS and other fleet management tools have become a big way for contractors to save money.

Both Marsiglio and Knaak said such tools allow them to track speeds and idle times, as well as efficiently route technicians.

“Being in a northern climate, we keep a close eye on that, because if an engine over idles, it’s just wasting gas,” Knaak said. “The first year we did that, we actually reduced our idle-time fuel consumption from 180 gallons a month to 40 gallons a month. That’s a significant reduction.”

While every company can’t afford to go out and upgrade its trucks, it can strive to be more efficient with what it does have.

“If a guy is working on a roof, we don’t care if he takes a break to warm up, but we ask that they do it in moderation,” Marsiglio said. “We’ve had guys idle in their trucks for an hour before, and that’s what we’ve measured since we got GPS. This has helped us save money and the service has already paid for itself.”

Long Range

Joseph Kokinda, president and CEO, Professional HVACR Services Inc., Avon Lake, Ohio, has a completely different problem. As a company with numerous jobs several miles from its home base, the company endured hefty bills hauling heavy trailers across the countryside.

To overcome this dilemma, Kokinda elected to move many of his assets to eight satellite storage areas based on the company’s 2014 schedule.

“We would pull a lot of weight, and our staff is transported from our Cleveland- or Chicago-area bases pulling our tools from job to job,” Kokinda said. “Now, these (storage) areas will store our trucks and inventory closer to the work. This act will prove to save us almost $150,000 in 2014 based on our calculations for fuel and maintenance of our vehicles.”

Kokinda is also exploring an investment in company hybrid vehicles to transport employees to the storage sites, further lowering transportation costs. The employees will do the job, then hop back in the hybrids and head back to company headquarters. Kokinda expects the savings to be significant.

“(This helps us) reduce the liability exposure for our company based on minor accidents, blowouts, and mileage towards vehicle warranties,” Kokinda said. “Fuel and maintenance for our fleet is the second largest expense behind only labor/subcontracting expenses. The savings will be put toward our training development program, which we need to enhance, and be able to pay for, without reducing our margins.”

The Future

As Marsiglio leases his vehicles, he now has four years to decide on what the next trend may or may not be for HVAC transportation. He expects the company to, more than likely, be even more conscious about fuel efficiency when the time comes.

“By then, we might have grown into the hybrid models, depending on what’s available,” he said. “We didn’t want to be the first in line in a new trend in work vehicles, but in the next lease cycle, we will take a look at proven hybrids and see how much more fuel we can save. We definitely want to be more conscientious about the fuel we’re burning, not only from a profit standpoint, but we are in a green industry, whether we want to admit to it or not. We don’t want to be wasteful.”

The hybrid vehicles are intriguing, Knaak said, but do bring some things to consider with them, namely size and return on investment.

Still, finding ways to make things happen is always on the forefront of his mind.

“We’re looking for ways to reduce our inventory to go into some of the smaller vehicles, and so far, we haven’t been able to get to that point and be efficient with what we’re doing,” Knaak said. “Every time you go into a smaller vehicle, it means you carry fewer materials, which means more trips to supply houses, and more time on the repairs. That very well may be the future, but we have to try to find that balance to make it work as well as possible.

“Ideally, we’d like to have a fleet of hybrid vehicles, but we have to find something that meets our needs.”

Kokinda has ways of rewarding drivers who help the company save fuel. He said the company offers offer small bonuses for the person who has the best fuel efficiency, which isn’t going to the guy who spends two hours with the truck running, filling out his paperwork, he said.

“We have to continue to adapt,” Kokinda said. “We’re always looking for ways to trim waste and find more profit.”

Publication date: 11/11/2013 

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