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Putting the brakes on gas expenses
Steve Silva of Steve Silva Plumbing has cut fuel costs by having employees drive to work rather than using company vehicles. Now, all the trucks are kept at the business. Lianne Milton/Register | Buy photos
Even as prices fall, businesses get creative
Saturday, November 15, 2008
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If you thought filling up your 15-gallon tank costs a lot, consider the plight of Steve Silva of Napa. His fleet of 22 trucks uses approximately 2,000 gallons of fuel a month.

“With the economy slowing down and high gas prices, it was a double whammy,” said the owner of Steve Silva Plumbing.
But as fuel prices have fallen as much as $1 a gallon in California over the past month, Silva said, “Now we have a little relief.”

While cheaper fuel costs are a welcome change, some businesses continue to watch expenses gallon by gallon. Unlike some service providers, Silva did not pass on the higher expenses to his customers.
“We basically absorbed the higher gas prices,” he said. “It affects our bottom line.”

The company tracks each truck and their gas station purchases, he said. And if you think Silva or many other small and medium-sized business have a line on their own gas supplies, you’re wrong.
“We go to the pump like everyone else,” said Silva. “There’s no discount for volume, that’s for sure.”

Silva said higher fuel prices caused him to reconsider aspects of his operations, such as the number of trucks he uses.

 “We looked at the guys traveling the longer distances and made sure they were in more efficient trucks,” he said.

“We parked two or three of the gas guzzlers — those getting eight to 10 mpg. They were older utility trucks that carry a lot of weight.”

Silva also looked into buying smaller pickups, but he isn’t sure the gas savings would cover the expense of a new vehicle. For now, he’s holding off on any purchases.

Cutting costs

Other businesses are seeking creative ways to control fuel costs. Enterprise might be best known as a rental car company, but it is providing a different service to Ruben Perez of Napa Electric.

“We were spending a lot of money on older vehicles with bad gas mileage,” Perez said. Putting a $3,000 transmission into a van worth $2,000 didn’t make much sense.

After analyzing maintenance and fuel costs for his older trucks, the business decided to lease 15 new vans; from Enterprise.

“We have about 50 vehicles we’re trying 15 with Enterprise to see how it goes. So far it’s been great. They paint them, they outfit them and they take the old ones back.”

With more than 50 trucks to gas up and maintain, at the peak of fuel prices this summer, the company spent as much as $18,000 a month on gas.

The Enterprise program will result in savings of $25,000 a year in gas, maintenance and repair, predicts office manager Tiffany Kuehl.

Besides new vehicles, simple ideas also make a difference.

“We made the guys plan better,” said Perez, for example, avoiding last-minute deliveries.

Perez also asks suppliers to deliver directly to the job site, not to Napa Electric’s headquarters.

“We did a lot of restructuring just to cut down on the trips Upvalley,” he said.

Perez isn’t the only one keeping a close eye on gas bills. Gary Garaventa, at Garaventa’s Florist & Gifts, has three trucks and spends about $1,500 a month on gas, he said.

Garaventa hasn’t increased his delivery fees, but “we’re being more diligent about grouping our deliveries,” he said.

“We try and make one or two runs at a time instead of three to five. But it’s hard.”

The business delivers from St. Helena to American Canyon. “My trucks are gone all the time,” he said.

Garaventa said he welcomes the recent drop in gas prices, but said, “I don’t know if it’s enough to make a difference yet.”

“We’re trying to do the best we can for our customers and not have to charge and arm and a leg for a delivery.”

Garaventa and others may find more relief on the way as retail gasoline prices dipped for a 17th week since July 4, falling below $2 a gallon in a number of states and as low as $1.77 in Des Moines, Iowa.

Retail gasoline prices fell to a national average of $2.22 a gallon, dragged down by the falling price of crude oil, which now costs 60 percent less per barrel than it did in mid-July.

The average price has fallen nearly 32 percent, and nearly $1 a gallon statewide, in the past month and, according to AAA, could be headed to $2 a gallon nationally by year’s end.

Oil prices continued to slide, to near $55 a barrel Thursday before rebounding slightly, as bad economic news from the world’s largest economies heightened fears that a global downturn will slash demand for crude.

“As the global economy continues to weaken, we’re going to see further downward pressure on oil,” said Stephen Roach, chairman of Morgan Stanley Asia, in Singapore. “I think we’ll certainly challenge the $50 threshold. We could challenge the $40 threshold.”

The Associated Press contributed to this story.
18 comment(s)

telebender wrote on Nov 15, 2008 7:03 AM:

" Those of us who have only one car and work for less than $15 an hour have a hard time feeling sorry for those businesspeople with fleets.
Don't cry, Steve, when was the last time you twisted a wrench or got covered in sewage? "

upvalley wrote on Nov 15, 2008 8:57 AM:

" I didn't read the part where Steve was "crying"-trust me, he's twisted his share of wrenches, etc. Congratulations to all of you on running successful businesses through good times and tough times. "

mom2 wrote on Nov 15, 2008 9:28 AM:

" I just don't like it when people assume that the owner of a business doesn't do the labor. It could have been yesterday for all you know.

The gas prices are making business owners think about the effect on their bottom line. I would hope that cutting back on trips and linking trips to make a difference in the gas bill for business makes a good impression on them. All of the cut backs mean less damage to the environment and a smarter way of doing business. Now just carry over to conserving energy at your office facility - cutting energy use and conserving helps the bottom line too. If we are smarter about how we operate then the pay off will be a positive bottom line.

And BTW, good for you telebender for operating one car. I have a few friends who have only one car they share to get to work and around town. Some other friends switched to motorcycles and others to bicycles. They switched to save money, but the benefit is that there are few less cars on the road and a few less emissions in the air. "

Newview wrote on Nov 15, 2008 9:40 AM:

" I would suggest changes in management and logistics. The process of moving Steve's employee's from point to point. How about substituting in Mopeds and bicycles. Plumbers on BIKES! That's what I say! Yes sir at least 65% of Steve's work force could be deployed in a economic fuel saving fashion to job site's while the other 35% could fill the tactical position of providing large equipment back up to the light moving plumber calvary. And think of the benefits, Steve's guys are great guys, that means that while moving in transport we get the benefit of the friendly personalities in moments at stop lights and stop signs! No more sitting in a car lane behind a huge, big Silva plumbing truck. Now there is always the benefit of scaling back production that will scale back costs however this is a brilliant compromise and will save on gas and save the enviroment as well. With job security too. The down side will be for the City and the police department as there will be a reduction in the overall contractors fleet buzzing about our streets at increased speeds to get to hardware supply, the next job site. Cutting us off in traffic, push, push, pushing to make that money. It is difficult at best to radar a speeding plumber on a bicycle, but I know the NPD will give it a try! Go NPD go!

Poking fun in hard times, I know Steve and he has worked hard, so have all of us. It is not the current time to point fingers. It is time for all of us to help each other and that includes the Register too. How about stories on the little guys who are working multiple jobs to keep their heads above the water line? "

winecountry0625 wrote on Nov 15, 2008 9:51 AM:

" The person from the first comment sounds like some sort of jealous community member or disgruntled ex-employee. Steve has done so much for this community and it's nobody's right to write garbage out of jealousy on the internet just because they can remain anonymous. I applaud him for building his business from the ground up and spreading his success throughout the community in a humble way. Anyway it's a good thing gas prices are going down because not only does it hurt citizens everywhere but it also hurts small and medium business owners alike, especially in an industry like Steve's. Let's keep these prices down!!! "

winghunter wrote on Nov 15, 2008 11:07 AM:

" telebender... Why hate on this guy just because he has done well for himself and you have not?? I bet he got covered in sewage plenty of times while growing his company what it is now. Just because you choose stay at you current job and make less than $15 an hour does not mean the rest of us don't work hard. On the bright side, once the share the wealth programs take affect you will be able to get some of our money for doing nothing. I will be mad because my tax's have gone up and you will still be angry and hate your job. "

reason-ator wrote on Nov 15, 2008 11:10 AM:

" That would explain why that truck couldn't afford to stop at that stop sign. It was cheaper to pull out in front of me. "

krusty wrote on Nov 15, 2008 1:21 PM:

" Brake pads are expensive too, reason-ator. "

dizzy wrote on Nov 15, 2008 2:17 PM:

" Thank you Winghunter!
I've known Steve for years and know plenty of people in the construction industry as well that have worked with him over the years. He is a great guy who has worked very hard to get to where he is at today. He employees quite a few people and gives back to this community. Too begrudge him his success while whining about your own failures reeks of jealousy. "

mom2teens wrote on Nov 15, 2008 2:32 PM:

" This is obviously a necessary business decision Mr. Silva had to make. But, for non economic reasons, I am glad he has made this decision. I get tired of our neighborhoods being filled with fleet vehicles that are brought home every night (Bell Products, Napa Electric, Steve Silva Plumbing, etc) and I'm not talking about the independent contractor who has his own work vehicle. You drive around the neighborhoods & see these fleet trucks parked along with all the recreational vehicles that are parked on side yards, on concrete addition to driveways and for extended periods in the street. It just sometimes gets to be an overload (and a code violation...but that's beside the point and an entirely different conversation).

And, on another note, to all the businesses who have vehicles with their name on the side (an excellent form of advertising) - you need to think about how you drive - you will lose customers due to poor driving. It leaves a bad taste in people's mouths (just look at reason-ator's comment) "

iplum2 wrote on Nov 15, 2008 4:56 PM:

" great, take away their medical coverage too because it is way to expensive. "

telebender wrote on Nov 15, 2008 5:12 PM:

" I love my job. I own a home free and clear. I wish Steve Silva all the best and am happy for his success...but why is this news? "

jeeper16 wrote on Nov 15, 2008 5:18 PM:

" Winghunter, I totally agree with you. I've known Steve for over 25 years and I remember him when he had just ONE little Datsun pickup. He is a fine and hard-working gentleman and he worked very hard to get to where he is today. I don't feel sorry for anyone like "telebender" who apparently didn't "make it" and is making less than $15 an hour. That was his choice. I, too, will be mad to see taxes go up for the wealthy so people can get "something for nothing" once Obama gets into office. It's a shame that people that have worked hard and been successful in life will have to take care of the "woe is me" crowd. It will be a sad day when this "over-tax the rich" mentality backfires on them and buisnesses all over the nation will be cutting back and raising prices on goods and services that ALL of us will have to pay more for. I don't think that these folks really realize what they are getting into. "

vocal-de-local wrote on Nov 15, 2008 6:09 PM:

" Jeeper, taxpayers are subsidizing businesses by picking up the social service/health insurance tab. The middle class are overburdened with supporting the weight of the low wage, uninsured worker. It hurts our economy when too many resources are distributed heavily in any one direction.

I suspect, however, that Silva pays his employees a living wage. Plumbers are usually well compensated. "

SouthNapa wrote on Nov 15, 2008 6:52 PM:

" Another weekend, another unnecessary fluff article. Zzzzzzzzzzzzzzzzzzzzzzzzzz "

JMB wrote on Nov 15, 2008 11:38 PM:

" This is not a fluff piece. This is informing Napans on how businesses are keeping with the times. Including not upping the consumers' costs. What the article did not include was the fact that Silva Plumbing has worked on coordinating managers and plumbers and techs to make sure they have every piece of equipment, tools, and parts on their trucks and vans so that an emergency delivery isn't needed, therefore an extra trip which would waste more gas and emissions. Steve Silva does treat his employees well and has good people working there. This is an extra step he has taken to not just cut costs (which we're all doing right now), but to ease the environmental impact. I don't see how this is 'fluff'. "

CaliGirl wrote on Nov 15, 2008 11:45 PM:

" Steve I applaud you for your unfailingly honest, straight forward way of doing business......your company reputation speaks volumes about your integrity as a business man and human being.

It takes an exceptional business man to absorb the increase in transportation costs and not pass it on to his customers. Especially when a lot of us are in the same or worse position than you are, it's nice to know someone is aware of the financial strains a plumbing problem can cause to those on a budget.

I work for one of your supplies and I find you to be one of our nicest most professional customers. Also as a loyal Silva Plumbing customer I find your employees always helpful, friendly and efficient at their jobs......

All around a great person, company, an asset to the Napa business community.....

Thank you..... "

Newview wrote on Nov 16, 2008 10:40 AM:

" Hey you know what? If you have never been self-employed and owned your own business then you would not know how difficult it is to be a successful business person in NAPA. What I know about Steve is that when he was driving that Datsun pick up and people with little money like my mom needed work done, Steve would come and labor for free. So Steve I will never forget how you helped my family with plumbing in tough times, so may you be blessed with more leaky faucets and new construction installation.

I believe these comment postings are good for the Napa community to allow communication and work to shake off the problem of Napan's holding resentments and gossip against Napan's. Gee, man! It would seem that it never stops. Mark Twain said, "thar is gossip and then thar is the truth". He mean't that when your gossiping you best be talkin' the truth. "

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