Now say your driver has to drive eight to 10 hours round trip to and from those jobsites. In this scenario, you would have $650 in labor to fuel the machines at those sites vs. the $352 MFR would have charged. "Most contractors' internal costs to operate their own lube trucks are well into the $95 range with all costs calculated," Davis points out.
MFR is also able to sell fuel at a lower price due to volume pricing. "Let's just assume we would sell it to you for 10¢/gal. cheaper than you purchased it," says Davis. "We saved you $50 in fuel and $298 in labor.
"The only time, in my opinion, when having your own fuel/lube truck really makes sense," he states, "is if you are on one big project where the truck is going to stay and run all day long there."
MFR helps contractors set up a customized plan to fuel equipment. "We generate the majority of our revenue dispensing fuel," says Davis. "At an $88 hourly rate, there is not a lot of money in that. We will help them improvise a plan that saves on cost and creates efficiencies, which is clearly in both of our best interests."
No contractor is too small to use on-site refueling services. MFR continually goes to jobsites where it services one machine. The alternative to the contractor is to get into a truck and go to a service station to get fuel. Usually, this is on-road diesel, which is 50¢/gal. more expensive than off-road diesel due to the tax.
Plus, many of the tanks at service stations only pump 6 gpm. So not only does it take time to drive there and back, it can take another 20 minutes to fill a 120-gal. tank. "We are dispensing at 40 gpm," says Davis. "We can fill that tank in three minutes." Once you add up all the costs, the small contractor could actually save money with a refueling service.
Beyond cost, liability is also a serious concern when you run your own refueling fleet. "Most contractors don't have the right insurance. They don't have the proper licensing," says Davis. "We have extraordinary coverage and insurance that are typically required for fuel vendors.
"Most contractors don't assume they're a fuel vendor, but they really are. They should have the same license requirements and permits that we have. A lot of them have huge exposure by not having these," he cautions. "Many contractors call their insurance company and say we have a service truck. It is written on their policy as a service truck. They do not indicate that it is a fuel truck that has hazardous materials."
On-site fuel tanks are also getting more onerous. In the past, you put a tank on the ground. "It wasn't a big issue," Davis notes. "Now you have to file for a permit. You have to get a site plan. You have to actually construct a pad and use explosion-proof wiring and a panel box to do it literally by code." All of this takes time and adds to your costs.