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Cal Wilson / March 18, 2022

What is surcharging and should your business do it?

If you accept any kind of credit card payment, you may have heard of surcharging. It’s the practice of adding an additional charge to a customer’s purchase to cover the fees a payment processor requires for processing credit cards.

While it may seem like a win for you, the merchant, it’s not a completely problem-free practice.

In this article, we take a look at this practice. Should your business consider it? What are the pros and cons?

Why do some merchants surcharge?

Every time a customer swipes their Visa, Mastercard, American Express, or other kind of credit card, you incur a processing fee. These are called interchange fees. According to Quickbooks, the following variables impact a merchant’s interchange fees:

  • The credit card company
  • The type of card being used – i.e., whether it’s a rewards card, a business card, etc.
  • How the transaction is processed – POS, over the phone, or online.
  • The price of the product or service.
  • The type of business of the merchant.
  • Whether the transaction is domestic or international.

Likewise, rates change twice a year, in April and October.

Interchange fees are just one of the many fees merchants are charged to be able to accept credit card payments.

How does surcharging work?

Without surcharging, that fee lies squarely on the merchant.

If you’re looking to pass that expense onto the customer, you have two kinds of surcharging options; brand or product surcharging. Brand surcharging adds a charge every time a customer uses a card from a specific credit card provider; some merchants may add a surcharge, for example, on Visa purchases, but not Discover purchases. Surcharging on the product level, however, only adds surcharges on certain types of cards under a specific brand. Merchants may choose one option, but not both.

Surcharging is subject to different laws in different regions.

As you can imagine, in order to protect the consumer, surcharging is heavily regulated. In some places, it is not legal at all.

In fact, in the United States, surcharging is illegal in Connecticut, Maine, and Massachusetts. In Canada, service fees can only be added on certain kinds of transactions.

For the regions where surcharging is a legal practice, merchant are beholden to a surcharging cap. These vary by area, but often fall around 4%. The caps are put in place to prevent merchants from making profit from surcharges.

No matter where you are, if you surcharge, your business is subject to rules of disclosure. Merchants must disclose their intention to surcharge ahead of a transaction, and at multiple touchpoints while a customer is in the store. This includes such notices as a sign notifying the business’ surcharging practice at the store entrance, as well as at the point-of-sale. The surcharge dollar amount should also be clearly visible on the customer’s receipt.

While these practices keep surcharging ethical, they can also be off-putting to some customers, who only see the addition of a fee they might not completely understand.

Does surcharging save your business money?

There is no simple answer to this question. It can, but it depends on your business and your customers.

According to Evolve Payment, “[i]f your industry is a ‘race to the bottom’ where the lowest price wins, then surcharging is likely to hurt more than it helps. This is especially true in B2B industries with corporate contracts.”

For some businesses, adding fees like surcharges is going to be more common practice and expected by the customer. In other industries, it might hurt your chance of making a sale.

Fortunately, there are other strategies.

So your credit card processing fees are eating into your revenue, but you don’t think surcharging is the right move for your business. Not to worry – there are other things you can do to ease the expenses.

For example, instead of surcharging, many businesses offer cash discounting.  In this practice, merchants discount the price of purchase if the customer pays with anything other than a credit card. And, while surcharging isn’t legal continent-wide, cash discounting is.

Cash discounting is only possible if you have a certain amount of wiggle room on your markup pricing. However, when it is an option, it certainly is a bonus for customer experience.

Another tactic is setting a minimum for credit card payments. Depending on your rates, it may not be profitable to offer credit card payments under a certain dollar amount.

Another strategy is working to reduce your overall merchant services spend. Part of this is exploring what options are available to you among multiple vendors, knowing rates are fair, and how to negotiate for the best price. A cost reduction professional who specializes in merchant services might be your best asset if you take this route.

In conclusion…

As Evolve Payment says, “surcharging is, at the end of the day, passing business expenses onto your customers.”

While it has the potential of saving you money on your variable expenses, it’s not always a great strategy optically. Offering cash payment incentives, working to reduce your overall merchant services fees, and ensuring you’re paying the correct rates, are alternative strategies to reduce your spend while keeping customers happy

Cal Wilson / March 18, 2022

What are variable expenses and how can they impact your business’ bottom line?

When creating a budget for your business, it is helpful to separate and account for fixed versus variable expenses. Mistaking the latter for the former can cost you, and the better you understand all your expenses, the better chance you have of optimizing them.

If you’re unfamiliar with the concept, the best way to describe the difference is that fixed expenses are costs that stay the same from month to month, whereas variable expenses are ever-changing and harder to predict.

Fixed expenses.

Fixed expenses often represent the largest part of your budget. For a business, your fixed expenses are going be costs such as rent payments, insurance premiums, property taxes, and so on. While these are not easy to optimize, they are easy to work into your budget, as they are unchanging and paid at a consistent frequency.

If you can lower these expenses – say, by finding a different insurance plan that works for your needs – you automatically save more money each month or pay period.

In business budgeting, it is important to remember that all your fixed costs must be paid, regardless of your sales that pay cycle. If you’re starting a business, making sure you can cover these expenses for a period before you start bringing in revenue is crucial to staying afloat.

Variable expenses.

Your variable expenses are going to represent the costs incurred by how a given month or pay period goes for your business. How many credit cards you swipe, how much electricity you use, or how much waste you generate; all of these are going to incur a bill that varies every cycle.

Some of these expenses can be harder to reduce than others. How much heating you use to keep your office warm, for example, may be more difficult to lower than the amount of waste your organization is generating. However, in many cases, these expenses are in areas that you can strategize or work with professionals to identify savings, creating a more predictable monthly bill.

Employees can represent either kind of expense.

Depending on how you staff your business, your employees can be either a fixed or variable expense. Anyone hired on full time, who is guaranteed a forty-hour work week, will be a fixed expense, whereas a seasonal or part-time employee will likely be a variable expense, as their hours are subject to change month to month.

Budget with these expenses in mind.

When you’re budgeting, it’s important to separate your fixed costs and your variable costs. If you’re able to determine what you absolutely will be spending in your fixed costs, then it is easier to identify and strategize areas to save with your variable costs.

Month to month, keep track of your variable expenses. Maybe one month you allotted too little to certain expenditures and went over budget. If you keep a closer eye on each cost category, you can do a better job budgeting and planning for the future going forward.

Don’t settle on expenses.

The lower you can keep your costs, fixed or variable, the better the results for your bottom line. If you don’t have experience negotiating rates or deciding what expenses are fair in comparison with the rest of the market, don’t settle. Explore your options, bring in consultants, and work with professionals who can guide you in the right direction.

Especially for the fixed expenses you will be locked into for some time, this could be a make-or-break decision for your business. Why pay more than you have to?

Cal Wilson / March 18, 2022

Five tips to minimize card processing expenses

As businesses are racking up debt and supply chain issues are increasing material expenses, cutting costs is more important than ever. With many businesses offering online shopping as an alternative to in-store, you might find your payment processing environment has changed or become more expensive.  

If this sounds like your business, here are five tips for reducing your credit card processing fees, and making the most of your revenue.  

1. Keep an eye on your rates.

Complete monthly audits of your merchant services statements to check for billing errors and avoid rate creep. Processors usually offer seemingly standard contracts, but many contain provisions that allow them to increase your rates. This often comes with the caveat they must notify you first — but those notifications could appear in small print on one of your statements. Be sure to read your statements for notification of rate increases and periodically check your rate to see if it has mysteriously increased. Often, all it takes for them to waive the rate increase is a phone call to object. 

2. Swipe cards and answer questions.

Credit card fees are primarily based on risk. This means you’re better off swiping or inserting a card than entering the number manually. Whenever a number is entered by hand, your processor considers it a higher risk transaction and may charge a higher fee. However, not all organizations have the resources to physically swipe or insert a card. If you’re inputting the card number manually, answer as many of the processor’s questions as possible. Providing information such as the customer’s zip code, debit vs. credit, and the three-digit or four-digit code on the back of the card are all designed to lower the risk of fraud. By entering as much information as possible and lowering the risk, you’ll see reduced transaction fees! 

3. Use an address verification service.

An address verification service (AVS), is a solution that verifies the cardholder’s billing address with the card issuer. It takes your payment services a step further in preventing fraud and has been a big benefit in the world of e-commerce, including limiting chargebacks. 

It works when during the checkout process, the customer enters their address, which is compared to the address on file with the issuing bank. Once the comparison is made, the issuing bank sends an AVS code to the merchant, who can then use the code to authorize or reject the transaction. 

Many major card issuers, including VISA and MasterCard, support AVS. 

4. Make sure PCI Compliance is up-to-date. 

A vendor will incur monthly fees from the Payment Card Industry (PCI) if its compliance questionnaire is not completed annually. These fees will continue to build up indefinitely until compliance forms are completed. The online questionnaire usually takes less than 30 minutes and saves hundreds of dollars every year. By completing the questionnaire, you assure your credit card processor that you are taking the proper steps to keep customer information safe and minimize the risk of fraud. 

5. Hire a professional.

An independent merchant services consultant will find you the lowest rates possible in your area, and can also track your rates going forward to make sure you’re never paying more than you should. For example, Schooley Mitchell looks out for your best interests by providing objective advice to reduce your electronic payment processing spend and improve service. 

Systematic analysis and auditing will: 

  • Uncover and eliminate hidden fees 
  • Identify and recover overcharges and billing errors 
  • Select and apply appropriate rate categories 
  • Ensure government legislation is properly applied 

In conclusion… 

Now is not the time for your business to be spending more than it needs to on credit card processing fees. In reducing costs and growing your bottom line, we hope these tips will be of aid to you.  

Cal Wilson / March 15, 2022

Hilliard Education Foundation – 2022 Denim & Diamonds
Strategic-Partner John O’Connell donated a limited edition bottle of bourbon that brought a winning bid of $600. The event featured a Wine and Bourbon Pull as well as a Silent Auction and raised more than $41,000 for classroom grants that enhance innovative learning experiences for Hilliard City School students.

Cal Wilson / March 14, 2022

2022 Multi-Chamber Business Expo
Strategic-Partner John O’Connell exhibited at the Expo sponsored by the Dublin, Westerville, and Hilliard Chambers of Commerce. The annual business development event is one of the largest in Central Ohio and a fantastic way to connect with local businesses.

Cal Wilson / March 11, 2022

Duluth City Council

We are ecstatic to announce that our own Marline Thomas was recently elected and sworn in as a City Council member for the City of Duluth. Her vision includes a vibrant, safe, connected, and innovative city where all can thrive. Read more about Marline’s position, here.

 

Cal Wilson / March 11, 2022

Construction companies – how can you keep expenses low when prices are on the rise?

2022 is looking to be a year of careful balance for construction companies. On the one hand, demand for projects is up, increasing job opportunities across the industry. On the other, ongoing supply chain issues, among other causes, are seeing the cost of doing business steadily increasing.  

In this article, we’ll examine the current climate for the construction industry, and share some advice on how contractors can keep certain expenses low to protect their bottom line and make the most of growing demand.  

Industry demand is on the rise in Q1 of 2022.  

A recent survey conducted by Associated General Contractors (AGC) and Sage found an overall optimism looking ahead into 2022 across construction contractors.  

Specifically, the survey found that contractors expect to see a high demand for the following kinds of projects: 

  • Highway and bridge  
  • Transit and rail  
  • Airports 
  • Water and sewage
  • Power infrastructure
  • Private sector
  • Healthcare facilities
  • Residential
  • Educational facilities
  • Manufacturing facilities

According to AGC and Sage, the only areas in which construction companies are unlikely to see an increase in business are in retail and private office projects.  

Many companies are looking to expand.  

These positive projections are leading many businesses to expand. In fact, 74% of the firms AGC and Sage surveyed responded they looked to increase their headcount in 2022, compared to only 9% looking to downsize.  

However, with continentwide labor shortages impacting all industries, many construction companies looking to expand are having trouble doing so. Not only does this prevent the companies’ desired growth, but also limits the projects they can take and turnaround time of completing said projects. 

The supply chain is also an issue. 

Labor shortages have only been made harder by supply chain delays inflating the price and availability of materials. The majority of contractors have found that projects are taking longer and costing more.   

According to international property and construction consultancy firm Rider Levett Bucknall (RLB) construction costs in Canada and the United States are up an average of 7.42% from pre-pandemic rates.  

So what do construction companies do to stay profitable? 

Even in difficult economic situations, there are strategies businesses can take to remain profitable.  

With the supply chain crisis, certain expenses are inevitably going to increase. Materials, for example, are an area where it is difficult to make concessions based on price, considering their necessity in finishing any job. So while the prices of materials and their delivery may be on the rise, cost management in other areas can go a long way in helping your bottom line.  

One such expense is fuel.  

Fuel is a big spend for many contractors.  

Every contractor goes through some degree of motor fuel, and that spend will vary from project to project. It is difficult to dedicate the time to sourcing the most cost-effective and dependable fuel supplier. However, optimizing fuel costs can hugely benefit your business’ bottom line.  

According to industry publication Construction Business Owner,  some areas where contractors struggle with their fuel spends include: 

  • Knowing how and when to purchase fuel at optimal levels.  
  • Ensuring accurate fuel inventories.  
  • Implementing tank monitoring and fuel-control systems, which “can drive greater business value through access to real-time fuel usage and cost data”. 
  • Auditing transportation and fuel related expenses to implement savings strategies and keener financial management.  

“No matter the size of the company, there can be a lack of coordination and communication between its various expenses,” Construction Business Owner warns. “This can result in additional, often unnecessary fuel-inventory reporting processes that can lead to disruptive runouts or inefficient refueling needs, with any mistakes potentially leading to higher fuel costs or prohibitive equipment downtime.” 

Depending on your location, some of your fuel expenses might be tax deductible.  

One solution to saving on fuel expenses is by understanding which of them are tax deductible. Quickbooks advises that construction businesses, you can’t deduct the commute between your home and the jobsite, but you can deduct trips between multiple job sites, as well as those made for business-related trips throughout the day. 

On top of the price of gasoline, various other transportation related expenses can generally be deducted on your yearly taxes. These include: 

  • Lease payments 
  • Insurance
  • Maintenance and repairs
  • Vehicle registration
  • Parking and tolls

Come tax season, make sure to work with your bookkeeper to be thorough and use deductibles to your business’ advantage.  

Work with professionals.  

There are software and technology that assist in monitoring and alerting managers to best fuel practices. Likewise, working with cost reduction professionals can save the time and hassle in auditing fuel spend, researching market insights, and finding and implementing solutions. 

In conclusion..  

With the construction industry looking forward to a prosperous year of growth and new projects, economic issues such as labor and supply shortages. 2022 will be a year of balancing opportunity with expense, and as such, there is no better time than the present to optimize fuel expenses.  

Cal Wilson / March 11, 2022

What are variable expenses and how can they impact your business’ bottom line?

When creating a budget for your business, it is helpful to separate and account for fixed versus variable expenses. Mistaking the latter for the former can cost you, and the better you understand all your expenses, the better chance you have of optimizing them.

If you’re unfamiliar with the concept, the best way to describe the difference is that fixed expenses are costs that stay the same from month to month, whereas variable expenses are ever-changing and harder to predict.

Fixed expenses.

Fixed expenses often represent the largest part of your budget. For a business, your fixed expenses are going be costs such as rent payments, insurance premiums, property taxes, and so on. While these are not easy to optimize, they are easy to work into your budget, as they are unchanging and paid at a consistent frequency.

If you can lower these expenses – say, by finding a different insurance plan that works for your needs – you automatically save more money each month or pay period.

In business budgeting, it is important to remember that all your fixed costs must be paid, regardless of your sales that pay cycle. If you’re starting a business, making sure you can cover these expenses for a period before you start bringing in revenue is crucial to staying afloat.

Variable expenses.

Your variable expenses are going to represent the costs incurred by how a given month or pay period goes for your business. How many credit cards you swipe, how much electricity you use, or how much waste you generate; all of these are going to incur a bill that varies every cycle.

Some of these expenses can be harder to reduce than others. How much heating you use to keep your office warm, for example, may be more difficult to lower than the amount of waste your organization is generating. However, in many cases, these expenses are in areas that you can strategize or work with professionals to identify savings, creating a more predictable monthly bill.

Employees can represent either kind of expense.

Depending on how you staff your business, your employees can be either a fixed or variable expense. Anyone hired on full time, who is guaranteed a forty-hour work week, will be a fixed expense, whereas a seasonal or part-time employee will likely be a variable expense, as their hours are subject to change month to month.

Budget with these expenses in mind.

When you’re budgeting, it’s important to separate your fixed costs and your variable costs. If you’re able to determine what you absolutely will be spending in your fixed costs, then it is easier to identify and strategize areas to save with your variable costs.

Month to month, keep track of your variable expenses. Maybe one month you allotted too little to certain expenditures and went over budget. If you keep a closer eye on each cost category, you can do a better job budgeting and planning for the future going forward.

Don’t settle on expenses.

The lower you can keep your costs, fixed or variable, the better the results for your bottom line. If you don’t have experience negotiating rates or deciding what expenses are fair in comparison with the rest of the market, don’t settle. Explore your options, bring in consultants, and work with professionals who can guide you in the right direction.

Especially for the fixed expenses you will be locked into for some time, this could be a make-or-break decision for your business. Why pay more than you have to?

Cal Wilson / March 11, 2022

Customers say the best service comes from small businesses

No one likes bad customer service. One of the most important aspects you should consider as a business owner is how to make sure your employees’ customer service reflects well upon the business. The good news is small businesses are already perceived as the leaders in providing consumers with excellent customer service.  

In fact, according to the recent American Express Global Customer Service Barometer, 81% of customers think small businesses deliver better customer service than their larger counterparts. In this issue of The Pulse, we look at why that perception exists, and what businesses can do to improve their customer service.  

Customer service matters. 

Customer service can make or break a sale. In fact, new data indicates that seven in ten Americans are willing to spend an average of 13% more with companies they believe provide better customer service. This represents an upwards trend, as the same studies from 2010 reported six in ten were willing to spend 9% more. 

On top of this, 78% of respondents to American Express’ survey reported having ended a transaction or not made an intended purchase as a result of a negative customer service experience. Likewise, the majority of respondents – three in five – indicated they would try a new brand in search of better service.  

If you aren’t working on your customer service presentation, you might be missing out on not only sales, but customer retention and referrals, too.  

Despite how highly customer service is valued, many consumers feel they are missing out. Most American consumers feel that companies aren’t paying enough attention to customer service.  

Bad service can cost you potential customers.  

It’s impossible to guarantee how every customer interaction will go. Despite what we may say, the customer isn’t always right. However, businesses should still focus on providing the highest level of service whenever possible, because even one unpleasant experience can be costly.  

Word of mouth is an incredibly powerful marketing tool, and consumers are likely to tell their friends – and the internet – about their experiences with your business. Unfortunately, they are more likely to spread the word if that experience was bad. American Express found that Americans tell an average of nine people about good service experiences, and an average of sixteen about poor ones. 

Why are small businesses excelling in customer service? 

With all the resources larger businesses have access to, why are smaller businesses having more success when it comes to customer service?  

Smaller businesses have the advantage of serving a smaller customer base, who they can get to know more personally in many cases. However, this does not mean that the larger the company, the worse the service. Larger companies can take notes from smaller businesses, as well as make use of the newest technologies to make their service stand out.  

What can businesses of all sizes do to improve their customer service? 

No matter what size your company is, if you’re worried about achieving excellent customer service, here are some strategies to improve quality and bring in more business.  

Keep on top of tech updates. 

If your tech is seamless and user friendly, it reflects well on you. This is important for your in-store equipment, such as Point-of-Sale terminals, as well as your virtual service platforms, such as chatbots and website features. Something as simple as the web hosting provider you use, which determines how quickly your web page loads content, could make an impact.  

Phone experiences are a priority.  

It is critically important that any employee taking phone calls and representing your business be professional, polite, and knowledgeable. Likewise, an up-to-date business phone system will improve the customer service experience by reducing wait times and dropped calls.  

Personalized interactions build relationships.  

If your staff and sales team focus on building personal connections and understanding a customer’s needs, rather than just pushing a sale, it will lead to a better customer service experience overall. Customers appreciate being able to trust personalized recommendations based on the expertise of your employees. If you’re looking for reviews, testimonials, and word-of-mouth marketing, personalized interaction should be a priority.  

Social media is a great chance to showcase your customer service.  

If your social media is a space you use only to promote yourself, you’re missing an excellent chance to interact with customers, and build new connections. The way you respond to comments and the voice you use in your posts crafts the perception visitors have about your brand. Make sure to use this to your advantage.  

Proper employee training goes a long way.  

One of the most frustrating experiences for a customer is when they ask an employee for help, and the employee is either unwilling or lacking the knowledge to help them. Proper training – making sure your employees are knowledgeable and enthusiastic – is a huge part of the overall image of your company’s competency.  

Be open and responsive to customer feedback.  

Whether online or in person, it’s important to take, listen to, and track customer feedback. When possible, responding in a professional rather than defensive way is also prudent.  

Using online tools, such as Hootsuite, or HubSpot, allow you to keep track of multiple accounts in one spot, and can make matters a little less overwhelming when interacting with online feedback.  

In conclusion… 

Customer service is valuable. Not just for your reputation, but for your bottom line too. While smaller businesses seem to have the advantage in this matter, there are a lot of strategies any company can employ to boost their customer service and improve their B2C relations. 

Cal Wilson / March 11, 2022

Gas prices are climbing. What can your business expect to see reflected on its fuel bill?

It doesn’t come as a surprise to anyone that when prices are climbing, gasoline is included. Experts are divided as to whether gasoline prices are going to keep increasing, or finally drop. In this article, we look at the state of gas prices, and what your business can do to help reduce your fuel spend.  

Gas prices are at a record high.  

As of February, gas prices are the highest they’ve been since September of 2014, with no immediate prospects of relaxing. In the United States, gas prices are nearly a dollar higher per gallon than they were in February of 2021.  

In fact, conditions are so grim that head of petroleum analysis at GasBuddy, Patrick DeHaan, believes ”the national average could be pushed to record territory by the start of the summer driving season.” 

The rates in Canada are much the same. For example, Metro Vancouver saw gas prices hit a record high in January, with prices reaching 176.9 cents per litre. In Newfoundland & Labrador, residents are comparing gas prices to a second mortgage.  

And while demand is also falling across the continent for consumers, hopefully leading to an eventual decline in prices, this does little in the meantime for the businesses who rely on motor fuel for their daily operations.  

This is abnormal for winter months.  

The surging prices across winter months, in colder regions, has been especially surprising.  

As explained by the publication Money, in colder months, “gas stations generally switch to a different blend of fuel that is more suited to colder weather. Because that winter blend is cheaper than the fuel blend sold in the warmer months — and because the demand for gas also tends to decrease when the weather is colder since fewer people are traveling — the price of gas usually falls at this time of year.” 

What is behind the climb in prices? 

Oil industry struggles at a global level are part of the reason prices are so high. Conflict in oil producing regions, COVID-related restrictions impacting the industry, and supply chain issues all account for these struggles.  

Likewise, in mid-February, the Energy Information Administration reported declines in inventories of both crude oil and petroleum, despite gasoline reserves being on the rise. Why does this matter? Well, 52% of the retail price of gasoline is based on how much the wholesale crude oil costs.  

 “As long as the price [of] oil remains elevated, consumers will be feeling it at the pump,” said AAA spokesperson, Andrew Gross in a statement. 

Now is not the time to be lax with your fuel spending.  

While different experts have different predictions for the price of gas in coming months, your business needs a more concrete strategy to save than hoping costs will come back down. Whether prices are going to rise more or finally fall during the coming months, your business should be prioritizing optimizing this spend where possible.  

Let’s look at a few different strategies you can use to bring down your gas spend.  

Fleet cards.  

A fleet card (or fuel card) is a type of payment card that allows for easy management of expenses associated with company-owned vehicles. Fleet cards are designed to be used specifically for expenses related to managing vehicles. Businesses such as trucking companies, ridesharing services, or delivery providers will often issue fleet cards to employees who use and operate corporate vehicles. This helps to cover fuel, vehicle repairs, and maintenance expenses.  

Fleet cards will help your fuel spend in the following ways: 

  • Accurate records and flexible reporting – fleet cards enable owners/managers to stay informed of all business-related expenses via real-time purchase reports. 
  • Spending history and budget control – because each fleet card is linked to an individual employee, a business can use their transaction information to monitor spend efficiency and fuel consumption, potentially reducing overall company fuel expenses and allowing for more accurate budgeting estimates.  
  • Fuel discounts – many fleet cards that are currently on the market offer additional fuel discounts and regular promotions. 

Fleet cards are also accepted at most gas stations, so your drivers will be able to fill the tank when and where they need to.  

Route optimization. 

Route optimization is a solution offered by several providers which uses software to determine the most cost-efficient route for a vehicle or fleet of vehicles. A good provider’s solutions will factor in every variable that could affect a driver’s route, including, but not limited to: 

  • Number and location of stops 
  • Number of deliveries 
  • Time windows 
  • Number or turns and intersections 
  • Traffic patterns 

This is difficult work for a computer to do, let alone a human brain. As Verizon puts it, “[w]ith just one vehicle and 10 stops, the number of possibilities is 3,628,800. But if you have a fleet of five vehicles, that number jumps to a whopping 37,267,043,023,296,000. This is why route optimization is mostly performed by computer algorithms and advanced heuristics that can quickly narrow down the options.” 

Optimizing your fleets’ routes means less time driving, reduced fuel costs, and increased productivity. All of these things improve your bottom line and make the job easier on your drivers.  

Best driving practices.  

While it seems mundane, keeping your drivers up-to-date on best driving practices can also help save on fuel. A change to everyone’s day-to-day habits may not have an immediate effect, but over time, it will result in less fuel wasted.  

In fact, according to the Government of Canada, adopting fuel-efficient driving techniques can “lower your vehicle’s fuel consumption and carbon dioxide emissions by as much as 25%.” 

The government’s five main tips for fuel efficiency are: 

  1. Accelerate gently 
  2. Maintain a steady speed 
  3. Anticipate traffic 
  4. Avoid high speeds 
  5. Coast to decelerate  

Other practices to consider implementing include: 

  • Reducing time spent idling – make it a habit to turn off your engine if you’re stopped out of traffic for more than 60 seconds. 
  • Keep an eye on tire pressure – underinflated tires can increase fuel consumption up to 4%!  

In conclusion… 

Right now, there’s very little we can do to control or predict the price of filling up our tanks. However, business must go on. The best thing businesses with fleets can do is be aware, and practice other strategies to help reduce their fuel spend.