Mike Andes says fuel spikes get attention, but labor is the real profit killer at 57% of revenue. The biggest lever isn't fuel prices. It's cutting labor costs through better routes, efficiency, and incentives.
obviously prices up about 50% on average from just a couple months ago before the whole war in Iran. And so when it goes up that fast, I think is what everyone freaks out about. And so when I saw that, I'm like, are we really attacking the wrong problem? Because if we went from, you know, last year 4% and this year becomes 6% because it goes up 50%, is that the problem? Or is it the fact that it's 57% of our revenue is going out to labor and we should figure out like route density or making this more efficient or figure out an incentive program or something to get that 57% down to 50%. Um, so yeah, that's where my mindset goes. And I think it's, uh, we also all look at the news and the headlines and it's much more fun to get anxious about those things.
Your argument is the reason I agree with it is because the number one offender on a P&L across almost every single company is P&L, is labor. And if you drive down labor, that's the biggest lever that you could pull on to move the needle in the business.
