It’s been a tough couple of years for construction companies, especially in terms of accessing building materials they need to operate. Manufacturing delays, supply chain interruptions, inflation and spikes in demand increased the cost of construction materials as much as 12% in 2022. By 2024, industry experts predict prices will be as much as 28% higher than they would have been under normal conditions.
Construction companies simply can’t absorb this level of rising prices, but passing the entirety of the increased costs along to the customer is equally untenable. For builders and contractors, the best bet is splitting the difference by looking for ways to cut costs in other areas of the business to make more room in the budget for higher material prices.
Here are four areas where you can shave some bulk out of your construction business costs. Be sure to give your logistics approach some attention too. Adding crowdsourcing to your mix can be the difference-maker and differentiator that will reduce your costs and boost your productivity at the same time.
1. Reduce time on the road
As the old saying goes — time is money. You can only complete billable work during a certain number of hours each day. Whether it’s delivering supplies to various job sites, running back to the office for forgotten items or picking up orders from suppliers, every hour your crew members are on the road instead of on the job is one less hour spent moving projects toward completion.
Labor costs can add up, even if you assign runs to entry-level workers that start on average at $19 an hour. That may not sound like much, but multiply that number by the number of hours each week your team spends driving back and forth between warehouses, suppliers and job sites, and the amount you’re paying for unproductive time adds up quickly.
Construction companies’ time and money are better spent keeping your crew on-site. Instead, leverage crowdsourced driver networks like Roadie to get supplies where they need to be and when they need to be there — filling even urgent orders within a couple of hours. Flat rates that work with your delivery needs let drivers do what they do best — drive — while your crew members can make progress on the job and level up their skills in this tough labor market.
2. Avoid unpredictable high fuel costs
Keeping valuable laborers off the road means your vehicles get a break too. This is good news for the company wallet, as the average price-per-gallon for regular gasoline hasn’t been below $3 since April 2021, and is currently on an upswing. February 2023 gas prices averaged $3.45 after a dip to $3.18 toward the end of 2022.
Diesel prices are even higher, averaging $4.53 per gallon as of February 2023. While diesel prices appear to be declining, they still remain considerably higher than pre-pandemic levels. Diesel’s highest 2019 price was $3.39 per gallon, followed by low prices throughout 2020. Since then, various economic and geopolitical factors have driven the price way up, including a peak at $5.78 per gallon back in June 2022.
Meanwhile, 21 miles per gallon is considered “good” fuel economy for a pickup truck. Send your parts runner 30 minutes back to the warehouse for missing materials, and you’ve spent $19 for his time plus another $12 for gas. Maybe that’s $31 well spent if you can keep the job moving, but crowdsourced deliveries using Roadie could save you money and keep your crew members (and their valued skills) on the job site.
And what if that run for parts is considerably farther? Drivers in the Roadie delivery network can accommodate same-day delivery as far as 100 miles. There and back, you’re looking at a couple hundred dollars of time and fuel for your crewmember to make a special delivery — and a day of lost productivity to boot.
3. Minimize truck maintenance costs
Using existing staff to run materials also costs money by way of increased maintenance needs. Vehicle experts say that pickup trucks driven in dusty conditions; those that carry heavy loads like construction equipment, lumber and supplies; and trucks that make several short trips daily may require more frequent maintenance to keep up with the extra wear and tear.
Contractors that opt for crowdsourced deliveries can avoid these extra maintenance and fuel costs, as well as the cost of insuring additional fleet drivers. Likewise, companies that partner with Roadie can lock in their delivery pricing and avoid the hassle of budgeting for variable and volatile fuel and maintenance costs.
4. Lock in delivery rates so you know what you will pay
While the convenience factor of having materials delivered directly to your job sites more affordably is a huge plus, crowdsourcing also helps reduce logistics costs in other important ways. With roofing, drywall, lumber and other materials costs hugely inflated right now, construction companies will likely want to jump on any deals their suppliers offer. But ordering outside of your usual shipment cadence can mean paying higher shipping fees. Moreover, urgent orders, like next-day requests to replace damaged materials, can be equally costly.
Crowdsourced delivery networks are an excellent resource, letting customers reap the benefits of less-than-truckload, overnight and same-day deliveries without paying exorbitant fees. With locked-in rates from Roadie, you can feel comfortable shipping any size order wherever and whenever you need it without overpaying.
Crowdsourcing can help manage expenses
At Roadie, we understand that rising costs can put construction companies in a bind. If you can trim some fat from your budget to accommodate increased costs, you will reduce some of the strain on your bottom line. Adding Roadie to your logistics mix is one way to knock out a bunch of excess expenses at once. This one change can eliminate the need to send your own crew members and vehicles to retrieve and deliver job site materials, lock in your shipping costs to avoid fluctuating prices and insulate your business from overages and fees related to on-demand shipping.
The Roadie team is ready to help you streamline your site deliveries, get your logistics costs in line and boost your productivity all at once. Learn more about how crowdsourced delivery is built for construction, and reach out today.
