Finding the energy to cope
2 September 2022
Brexit, Covid-19, lockdowns, furlough – since 2020 it’s just been one major challenge after another. And now it’s eye-wateringly spiralling energy costs along with generally rising prices. One analyst even forecasts a UK inflation rate of 22 per cent next January.
I wondered how hirers are coping and what solutions – if any – they are finding, so I conducted a quick straw poll amongst a handful of them.
As discussed earlier on the blog, households and businesses are experiencing steep and sudden increases in their energy bills. But what can you do?
“We’ve had a number of quotes from our energy supplier in recent weeks and the cost seemed to increase on an almost daily basis,” said Keith Hallam, trading director – tool hire with Bradfords Building Supplies. “However, they did come back to us with revised options and a costing which is still high, but not quite as bad.”
So perhaps something to bear in mind is that it can help to enter into a dialogue with your supplier.
As also mentioned previously, Bradfords has already successfully explored ways of reducing its carbon footprint and its energy usage. “And of course we have always encouraged people to switch off lights and appliances when not in use,” adds Keith.
Similarly, Brett Thompson, managing director of Alide Hire Services, says that “We’ve done what most companies probably have, sending out the generic message to all our guys to make sure they don’t waste energy and to treat the depot like their own homes. If they can, it’s lights off, power off and heating off if they’re not needed.”
On the flip side, rising energy costs are encouraging contractors and end users to explore new technology solutions. Brett says that demand for equipment like solar powered site lighting is increasing sharply, for example.
This is echoed by Neil Graham, managing director of The Hireman. “We’re trying to help customers with new equipment that we’re adding to the fleet. About 12 months ago, for example, we started buying generators from MHM with an auto stop-start facility like the ‘eco’ systems on petrol and diesel cars. We bought a load of them recently, marketed them to our customer base and many are using them as a cost-effective solution to reduce fuel costs and meet sustainability targets, particularly in central London.
“Machines like diggers and compressors with Stage V diesel engines are also proving popular for the same reasons. And keeping your fleet up-to-date helps boost energy efficiency. We’ve also switched to HVO fuel rather than white diesel because it reduces emissions and is more efficient, giving slightly better fuel consumption.”
Another hirer who I spoke to highlighted a factor that could have long-term implications for businesses. “We still have a significant proportion of people who are working from home and are likely to remain doing so. Perhaps we are heating and lighting rooms and spaces that are larger than they now need to be. Maybe we should downsize our premises.”
Back at The Hireman, which has three depots in Canning Town, Croydon and Wembley and its administrative HQ in Bermondsey, Neil Graham told me that for several years the company has used the services of an energy broker. “They’re superb. We have three different suppliers throughout the business and we are on fixed-term deals for the next 12 months, which gives us a bit of protection in the short term. We have a great relationship with our broker and it’s proved very important.”
Looking more widely, Neil believes there are other options to explore. “We are starting conversations with all of our teams, from apprentices and fitters, to hire controllers and managers, asking them for their ideas: what can we do to be more economical from their points of view? There are obvious things like switching off lights in unoccupied rooms, and we already monitor vehicle idling time and fuel economy through our tracking system, but perhaps there are other measures we can take in different areas of the business.
“It’s a case of making people aware that, if you help us by acting together, we will get through this better and be in a stronger position to help you.
“Our Canning Town depot has solar panels on the roof and we barely pay anything for electricity there now, which is tremendous. Unfortunately, it’s difficult to install them at the other buildings. Incidentally, I’m noticing that a lot of new trading estates are building units with solar provision, which is a good sign.”
Neil believes that the political vacuum created while the Conservative party chooses a new leader (due to be announced on September 5) and prime minister has been unfortunate.
“I’m hoping that the government’s ideas for addressing the situation come thick and fast once the contest is over. For one thing, we need to know in order to help calculate pay rises for our people. We’ve already had two increases this year, one in June which is our normal review, and another before that in April to try and combat the early effects of inflation when it was around six per cent. We felt we had to do something.
“Our next scheduled review is in December but we might bring that forward. We have to, to help our people fill their fridges and keep their heating on.”
Another praiseworthy initiative that The Hireman introduced some time ago is having a well-stocked canteen at each of its locations, offering free provisions and enabling personnel to take meal and refreshment breaks.
“We stock them with everyday food items and we’re upping that in the current economic climate,” says Neil. “We provide essentials like, bread, butter, spreads, ham, cheeses, eggs, baked beans, soups, fruit, snacks and the like. We do a main shop at the start of the week and occasionally it gets topped up between times with a quick visit to the local supermarket.”
He says that staff are using it more – without abusing it – in these current inflationary times. “Hire depots are often in locations that don’t have quick access to shops and eating places, perhaps with just a McDonald’s or a Subway in the petrol station round the corner, or a greasy spoon caff, which isn’t exactly eating well. So that’s one thing we are doing to try and help.”
Looking to the future, Alide Hire Service’s Brett Thompson sees positives on the horizon. “As a country, we still have to build houses, we have the existing infrastructure to maintain, and hopefully the government will realise that if you keep incentivising companies like ours that collectively spend hundreds of thousands of pounds on equipment (with schemes like the super deduction tax capital allowance), that will encourage investment, turnover and growth.”
Nevertheless, testing times lie ahead that will, as always, require sound management and good judgement.
