It has been a challenging year for most as costs are rising and inflation is becoming real. Last summer economists created a new term “transitory inflation” promising that it was a short term issue and all would settle down as supply chain issues were resolved. Well, that was wrong as inflation continued to rise and a year later, we peaked ay 9% inflation year over year in April.

Over the past 6-7 years most of our costs have remained relatively stable except for labor. Labor is our greatest cost, driving our overall costs to rise faster than base inflation rate as we work to attract and retain our great team. This year with our many of our next highest costs (fuel, fertilizer, and equipment) have risen significantly faster than the base inflation rate. Continued record low unemployment is keeping labor costs rising still.


Fuel costs up but we haven’t considered fuel surcharges


With fuel up over 50% compared to last year, we’ve heard that several of our competitors have tried to pass on a fuel surcharge. Although this is a significant cost for us, we honor our contract rates and have not considered a surcharge. We have also heard of some of the surcharge rates being around 5% which we believe is significantly greater than the cost increase turning the surcharge into a profit center. It is frustrating when businesses take advantage of rising prices to increase profits. 

Fertilizer costs have over doubled


Mostly due to the fact that Russia produces much of the raw materials used in fertilizer, the war in Ukraine has disrupted the supply chain driving up costs to over double since last summer. As a key part of our service to keep lawns and plants healthy, fertilizer costs are unavoidable. We will fertilize despite. 

Equipment costs have risen by over 20%


Two examples are our production truck cost has risen from $62,000 to $76,000 since 2019, 22% and our 21” hand mower cost has risen from $1,128 to $1,499, 33% We are proud to have one of the most updated truck and equipment fleet to ensure our team has the proper tools to perform great service. This keeps us efficient and assists in our goal to reduce our carbon footprint as newer equipment have lower emissions. It is difficult for us to consider to allow our equipment to age reducing our efficiency and slowing our goal of lower emissions. 

Labor costs continue to rise


Labor costs have risen for most service businesses as a combination rising minimum wage rates and low unemployment have driven our wages 75% in the last 10 years and 30% over the past 5 years. In addition, mandatory increases in health care, sick leave and other personnel costs have also driven up labor costs. We have to keep up with these costs to attract and retain the workforce to provide the service our clients expect.   

Working to improve efficiencies to offset cost increases


We have always worked hard to offset increased costs and are proud that during our long history we have offset most cost increases. For example, as stated above, with labor costs risen 75% in the past 10 years, our costs to most clients have risen only one third of that through our work to improve efficiencies. With a strong commitment to training when we formed 21 years ago, we are proud to have the best trained and efficient team. We have also worked through LEAN process planning to have mapped and developed critical paths to improve efficiencies on all properties. We also have utilized plant growth regulators to reduce pruning frequencies. We are always working hard to offset labor cost increases.

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