Why rising fuel costs = increased competition

Fuel. And fuel costs. And the impact of fuel costs on running your fleet. And the impact of fuel costs on your profit margin and on your bottom line. That's what's tops on the minds of most of the contractors we've talked with on our annual "reader call" visits so far this summer. Not really a surprise given the nasty spike in oil costs and fuel pricing, but it is the first time in years that "employees" or some aspect of employee management (hiring, firing, training, retaining) wasn't the Number One Concern of Pavement readers. And "employees" even dropped a spot or two on a list of critical issues we discuss with contractors, replaced by declining margins and increased competition, which many contractors view as two sides of the same coin. The work is out there, contractors tell us, especially striping and pavement maintenance work. But the rise in fuel prices and the rise in prices of materials has meant smaller margins, which means more contractors are bidding for more work to try to maintain sales volume. In fact, most contractors we've talked with say the number of bids they're competing against on the average job has just about doubled over the last year, and that often leads to some closer-to-the-bone bidding, which then impacts margin and bottom line. Sound like your business this year? Let us know one way or the other.

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