WITH fuel distribution operations spread across what has been acknowledged as the largest and most congested urban area in the United States, Conico Oil Company leaves nothing to chance when it comes to fleet safety and reliability. Management keeps a close watch on every aspect of the operation.
Headquartered in Westlake Village, Conico Oil sells and delivers refined fuels throughout Southern California ranging from the South Bay to Paso Robles. Many of the company’s 30 petroleum transports make multiple runs each day across the greater Los Angeles area in the course of a three-shift operation that keeps the fleet on the road virtually 24-hours a day, seven days a week.
“Very simply, we have high expectations for our fleet operation,” says Peter Hong, president and founder of Conico Oil. “We expect high-productivity, incident-free performance for our fleet, and we have a zero-tolerance policy. To meet those objectives, we hire what we believe are the best drivers in the industry, and we have incorporated a significant amount of leading-edge technology—including on-board cameras—to help us meet our goals.
“Our mission is to provide and transport quality fuel products safely to our customers in a timely manner at a fair price while providing the highest level of customer service and the best buying experience in the industry. We are committed to being the preferred supplier of Shell gasoline for both commercial and retail customers in Southern California.”
Hong grew up in the business, helping his father with seven retail service stations. When Hong married in 1988, his father gave him one of the stations as a wedding present, and Conico Oil Co was born. In the years since, the company has steadily grown and diversified.
Today, Conico Oil delivers and sells in excess of 359 million gallons of gasoline and diesel annually. The company also distributes a wide range of Chevron- and Total-branded lubricants and Wix and Donaldson filters.
The company currently operates 29 Shell branded locations (including a truck stop in Oxnard), 22 USA branded locations, and 10 ARCO branded locations. Over the years, the company has grown through buying and selling retail locations, converting traditional facilities into c-stores, adding car washes, and developing new properties from the ground up.
“Every company-owned retail location in our system has a car wash,” Hong says. “People in Los Angeles like to wash their cars regularly. In fact, California in general is a good market for car washes. We pay a lot of attention to our car wash operations, and we update or replace equipment every five years.”
When Shell exited direct marketing in 2010, Conico Oil added fuel wholesale operations to its portfolio. Fuel transport was added in 2013, followed by the acquisition of MacValley Oil Company in Oxnard in 2014. Both changes had a significant impact on the company.
“It was kind of an accident that we purchased MacValley,” Hong says. “We were looking for another place to park some trucks, and we were already delivering some fuel to them. When MacValley came up for sale, we jumped on the opportunity.”
MacValley gave Conico Oil increased involvement with agricultural customers, which now make up about 20% of Conico Oil’s business. MacValley came with three petroleum tankwagons and a bulk plant with storage for 40,000 gallons of gasoline, 70,000 gallons of dyed diesel, and 30,000 gallons of undyed diesel. MacValley also has bulk storage for lubricants.
Hong made the decision to add petroleum transports to his operation because he felt he was not getting the service he needed from other carriers. “When we became a petroleum wholesaler, we needed more transportation flexibility and delivery reliability,” he says. “We hadn’t planned on moving into transportation, but it has worked out well for us. It turned out there was a lot of demand for a service-focused petroleum transporter, and we now haul for quite a few petroleum marketers across southern California.”
Conico Oil started its petroleum transport operation with eight tractor-trailer rigs purchased from a Bakersfield, California-based fuel hauler. Fleet growth has been slow but steady, and the company probably will expand its current 30-transport fleet by four to six more tanker rigs before the end of 2018.
The fleet is dispersed among six parking locations across its operating area, and transports pull loads out of 10 to 11 loading racks.
“We use what we call reverse logistics for the way we position our fleet resources,” says David N Burrow, Conico Oil general manager. “Only four of our transports are based near loading racks. The rest are domiciled near delivery locations, which means few if any empty miles at the end of a shift.”
David Cox, Conico Oil dispatch manager, adds: “Regardless of where our drivers are located, we stay in close touch with them. We use Creative Energies software to manage and dispatch loads. We send the dispatch instructions to the PeopleNet on-board computers in the tractors.”
Dispatch instructions include a map of each delivery location showing exactly how the driver is to enter and exit that location. Delivery sites are geo-fenced.
Trips average 60 miles, with 200 miles being the longest trip for the operation. The carrier uses relays to boost the efficiency of some longer trips. In most cases, drivers can do two loads a day. However, an 80-mile run through the Los Angeles area will take five to six hours.
Conico Oil slipseats its tractors with up to three drivers per vehicle, which keeps most of the trucks running virtually 24 hours a day. Tractors run upwards of 25,000 miles a month.
“We currently have 83 drivers for our 30 tractors, we want to reach 90 drivers as soon as possible,” says Burrow. “However, drivers are in short supply and we have no intention of lowering the bar for driver qualifications. We want the best drivers in our trucks.
“At the same time, we actually prefer to hire drivers with no previous tanker experience. We have specific ways we want fuel delivered, and we don’t want drivers taking shortcuts.”
Drivers do need hazardous materials and tanker endorsements to be hired. Conico Oil pays drivers by the hour, along with a monthly bonus for safe performance.
Regardless of driving experience, a new hire spends three to 12 weeks in training. It is a tough process, and the company has a 20% rejection rate for trainees. Most of the training time is spent with driver trainers, and three different trainers have to sign off on the new hire.
From the outset of the training, new drivers learn that safety plays a critical role in the operation and is supported by a wide array of safety technology. On-board cameras are perhaps the most important piece of technology on the safety side.
“About four years ago, we began installing the SmartDrive video-based safety system in our trucks,” says Mike Goldberg, Conico Oil safety manager. “From the very start, we selected forward and cab-facing cameras. Two years ago, we added side cameras on the mirrors outside the cab.
“SmartDrive has worked closely with us on event-scoring (seatbelts, speeding, cell phone use, etc) that is part of our safety program. SmartDrive personnel review all of the video from our fleet, and they provide those segments that show violations, which we use in coaching our drivers. This is a great benefit, because we don’t have to weed through hours and hours of routine video. The computer dashboard provided with the system is fantastic.
“Most importantly, we get the video right away if our trucks are involved in an accident. The accident review benefit really pays for this system. Having video coverage helps avoid many costly fights with insurance companies.
“When we were rolling out the SmartDrive safety program, one of our trucks was involved in a side-swiping incident. The video clearly showed that the other motorist was at fault, and our driver was exonerated. That single event really encouraged our drivers to buy into the video-based system.”
Management believes the performance scoring system—backed up by video—makes drivers better at their jobs. “Coaching with video is much more powerful than telling a driver what to do,” Goldberg says. “It is more effective at correcting bad behavior. For instance, cell phone violations have been virtually eliminated. We saw one driver go from worst to best through the coaching.
“Video showed one driver falling asleep behind the wheel. He had no idea that was happening until he saw the video. He went to the doctor immediately and was diagnosed with severe sleep apnea. He had treatment and is recovering. Without the cab-facing camera, we would not have seen the problem.”
Goldberg says the company has achieved complete driver buy-in to the program, and the safety scores are tied to the video reports. Drivers are very engaged, and many will call in as soon as they see any change in their scores.
In addition to video-based safety, Conico Oil has deployed an array of safety technology in its tractors. Systems include Bendix lane-departure technology and blind spot alerts. Air disc brakes are specified on tractors and trailers.
Keeping truck technology current is one reason Conico Oil leases all of its tractors. “We believe it is critical to keep up with technology, especially where it impacts safety,” says Daniel Baillargeon, director of transportation at Conico Oil. “We lease tractors on a three-year replacement schedule from Ryder and TCI Leasing.”
The fleet currently runs Freightliner Cascadia daycab tractors that Baillargeon says are the lightest on the market and have a very tight turning radius. A full tractor-trailer rig in the Conico Oil fleet offers a tare weight of 25,380 pounds.
The newest tractors were specified with Detroit DD13 engines set for 475 horsepower, Detroit DT12 automated transmissions, SAF Holland aluminum fifthwheels, and wide-base single drive tires.
Conico Oil owns the Beall four-compartment petroleum trailers. The 9,100-gallon trailers have double bulkheads between each compartment. Tank specs include Dixon Bayco APIs and elbows and Betts internal valves and domelids. LED lighting is used from front to back.
The newest trailers were specified with Hendrickson Intraax air suspensions with WABCO disc brakes. In addition to Hendrickson’s Tiremaax inflation system, trailers have aluminum disc wheels and Hankook wide-base tires.