AFTER acquiring several fuel oil jobber businesses with a variety of brands and modes of operation, managers at Petro Heating Oil and Services (Petro) decided about two years ago that a new operation campaign was in order to establish a uniform level of service.
Today, the company, a division of Star Gas and based in Stamford, Connecticut, has installed new information technology products, centralized home and commercial service communications, leveraged a single brand, and emphasized the importance of compiling and analyzing customer product usage. The fleet consists of 640 tank wagons and 15 transports that are used to transport and deliver fuel oil.
“We've been concentrating on stabilizing our fundamentals,” says Steve Goldman, operations vice-president. “Petro competes with distributors offering a broad range of services and prices, from full service distributors to those offering delivery only. Long-standing customer relationships are typical in the industry. Like most companies in the home heating oil business, the heating oil segment provides home heating equipment repair service on a 24-hour a day basis. This tends to build customer loyalty.”
Petro supplies fuel oil in parts of the Northeast that include Boston, Massachusetts; Providence, Rhode Island; Norwalk, Connecticut; Baltimore, Maryland; Philadelphia, Pennsylvania; Washington, DC; Pensauken, New Jersey; and Maspeth, Hicksville, Plainview, and Yaphank, all in New York.
Of that fuel oil market, Petro claims a 13% to 15% share, and handles about 500 million gallons annually for 500,000 customers. The company is the largest home heating oil supplier in the United States, Goldman says.
Fuel oil division suppliers include Amerada Hess Corp, BP North America Petroleum Corp, Citgo Petroleum Corp, ExxonMobil Oil Corp, Global Companies LLC, Sprague Energy, and Sun Oil Company.
About 80% of the company's supply of fuel oil arrives via barges and is offloaded into independent fuel oil terminals from which Petro serves its customers.
One of the efforts in the service planning, and the one that allows the company to gather and analyze data essential to the operation, was the decision to use ADD Energy software from Advanced Digital Data (ADD) Inc.
The software is designed for petroleum and propane marketers and provides a management system that handles accounts receivable, credit, delivery, service, and inventory.
An ADD product, Raven, includes a touch-screen, hand-held device that the company's 400 drivers use to process delivery information, including payments and charges. Drivers can print an invoice for the customer in the cab of the vehicle.
The Raven system stores information on addresses, prices, price-protection plans, taxes, and customer balances. Posting of deliveries and payments are linked to the main office system.
Another ADD system, Pegasus, provides dispatch and wireless field service solutions. Pegasus gives dispatchers, technicians, and customer service representatives tools for added control over daily operations.
A service monitor displays up-to-the-minute, user-defined, color-coded warnings and tracking information in order to monitor the progress of technicians and service calls. Field technicians can be linked into dispatch through the mobile wireless unit.
“With this system, we can make proactive management decisions by comparing the expected times for service calls and technicians to actual times,” says Goldman.
The data collection enables quick analysis of customer product usage, which can vary in many different ways. Although traditional ways of anticipating customer demands remain in effect, such as historical degree/day data, other influences play a role. Knowing more about customer habits based on geography, previous history, and deviations is important.
“We've seen a 70% improvement in delivery accuracy since we began this new program,” says Goldman. “We try to meet or exceed our competitors. All of this adds up to assuring that the customer does not run out of fuel.”
Despite using the latest technology, Petro has not compromised personal service, points out Ben Kunz, marketing and employee communications manager. “Customers still want to have personal contact,” he says.
That means heating oil customers can call a local office and talk to a representative, while those needing furnace repairs, equipment installation, and other services can reach the centralized call center by calling a toll-free number.
With the Pegasus system, a technician can report a customer query or complaint at the scene to a customer service representative, who in turn can immediately contact the customer to work out the problem.
Goldman and Kunz agree that good customer service, particularly in a timely manner, is the number one priority for meeting market demands, as well as competition from other fuel oil distributors. “Service is really the name of the game in this business — and our key point of difference in this highly fragmented market,” says Goldman.
Customer service is emphasized as well in the company's driver training program, which is conducted at each local distribution center. After drivers are qualified, they usually are assigned to specific routes to keep them familiar with individual customer requirements. Petro is on call 24/7 to provide customers with service around the clock.
Another priority for Petro is establishing a well-recognized brand. After the acquisitions, the company found itself with a fleet of trucks displaying various names.
Rather than changing the name to Petro at once, managers decided to add the Petro logo to the one with which customers were familiar. Over a few months, the logo began to stand alone.
“The trucks are a big advertising plus for us now,” says Kunz. “They are moving billboards.”
Petro has tankwagons with capacities ranging from 2,800 gallons to 5,000 gallons. The current standards for Petro-spec'd trucks are 3,600 gallons and 5,000 gallons. Using large capacity tanks proved more efficient, requiring fewer trips to terminals.
The newest tankwagons in the fleet were assembled by A&M Truck Center and Boston Steel and Manufacturing. A&M provided tankwagons with Trans-Tech tanks mounted on International chassis. Boston Steel tanks are mounted on Freightliner chassis.
The Trans-Tech tank is equipped with Betts valves, LED lighting, and domelids; Hannay stainless, single-wrap hose reels; Scully hose nozzles; Liquid Controls meter assembly; and Civacon overfill protection.
Boston Steel supplies aluminum tanks with Betts air emergency valves and Liquid Controls meters. Tanks also have Boston Steel's single-wrap reel, typically with Goodyear hose and Scully nozzle.
Bottom-loading equipment is in place on some of the tankwagons. They have a Betts bottom-loading manifold and are set up for future additions of bottom loading and vapor recovery.
The 5,000-gallon trucks typically have 380-horsepower Caterpillar engines and Allison automatic transmissions. With more drivers entering the workforce without manual transmission experience, and the frequent stops and starts involved in fuel oil delivery, Petro has made automatic transmissions standard in the tankwagon fleet.
Ice and snow present the toughest winter challenge for delivery drivers. To provide better handling for the trucks, Petro specifies Insta-Chain, an ice and snow chain system operated automatically from inside the cab. When the switch is pushed, a chain wheel contacts the moving tire and activates the chains. The system also can be disengaged in the same way.
Transport tank trailers have 9,200- to 10,600-gallon capacities, aluminum construction, and one to three compartments. They are equipped with both Scully and Civacon overfill protection systems. The units are primarily utilized in transport service to supply Petro terminals.
The company's newest tank trailers are from Heil and are specified either 9,200 gallons or 10,600 gallons with three compartments. They are equipped with Civacon Rom II overfill protection systems.
Petro recently has ordered two International and two Mack tractors. The Internationals are spec'd with Caterpillar 410-horsepower engines and Dana/Spicer axles. The Macks have 400-horsepower Mack engines, as well as drive axles and suspensions. Spicer supplies front axles. All the new tractors are equipped with Eaton Fuller 10-speed transmissions, Alcoa aluminum wheels, and Holland fifthwheels.
As for vehicle repairs, Petro has shops at each local distribution center. Almost all repairs on the trucks, tanks, and components are handled at the shops.
At each location where trucks are parked, security has become essential, says Goldman. All areas are fenced and gated. Some facilities use infrared detection devices.
Petro understands first-hand the importance of security following the terrorists attacks on the United States in 2001. At that time, the company's phone and cable lines were centralized in the Trade Center towers in New York. Although service was lost when the buildings were destroyed, the company was back up and running within 24 hours, Goldman says.
Looking toward the future, the company plans to continue building its service program that is now on a well-planned, reorganized foundation.