New England petroleum distributor upgrades operating technology

Jan. 1, 2010
NOT MANY companies into celebrating a 100th anniversary. To reach that level of success, they must be able to adjust to an ever-changing marketplace and

NOT MANY companies “luck” into celebrating a 100th anniversary. To reach that level of success, they must be able to adjust to an ever-changing marketplace and willing to try new technologies in order to keep the business moving forward.

For example, take Dead River Company, Portland, Maine. The company was founded in 1909 by Charles Hutchins as a timber harvester along a branch of the Dead River in western Maine. The company bought its first gasoline station in 1936 and initiated a home-heating program in the 1940s.

A century after being founded, the company — still family-owned — has become one of the largest distributors of petroleum products to retail and commercial customers in northern New England — particularly throughout the states of Maine, New Hampshire, and Vermont.

Success didn't happen by accident, and didn't come overnight. It was the result of sensing a shift in existing market dynamics, identifying new opportunities, and then having the fortitude and wherewithal to move the company in new directions.

New technology

Dead River has been aggressive in adopting new technologies to improve operations. For instance, the petroleum marketer recently announced that it has signed a five-year deal to use FuelQuest's Fuel Management System (FMS) and Zytax Compliance Solution. FMS will be used to optimize fuel inventory, decrease operational expenses, and reduce the costs of procuring and managing petroleum product purchases. Dead River Co will Zytax to automate state fuel tax filing processes.

“As a bulk distillate company, we needed a solution that addressed all of our business needs, not just our fuel retail needs,” said Dick Roderick, Dead River Co senior vice-president. “FuelQuest is that solution. It will address the needs of our entire supply chain, automating all of our processes — tax compliance included — allowing us to focus on our customers and their energy requirements.”

System capabilities include the ability to monitor daily and cumulative inventory variance in the Dead River Co bulk plants for improved inventory control. Dead River Co operates a network of 56 bulk plants or bulk-distribution facilities spread out among the communities it serves.

A typical Dead River Co bulk facility has four to six vertical aboveground storage tanks (ASTs) that are used for storing No 2 fuel oil, kerosene, and on- and off-road diesel. The plants generally range in capacity from 20,000 to 60,000 gallons, although there are some as large as one million gallons.

“We buy the product, distribute it to our bulk facilities, then our trucks pick it up from those locations and go house to house to deliver the product,” says Levi Ross, Dead River Co manager of supply and logistics. “The re-supply of product coming into the distribution facilities is a 24-hour operation, while our delivery trucks typically load during normal working hours.”

Tank gauging

With that much product moving that rapidly through the system, tank gauging and monitoring at every bulk distribution facility is man-hour intensive.

“The majority of our locations have tape gauges that have to be read manually on a daily basis, which means that somebody physically goes out and reads the tanks once a day and then anticipates reorders based on the supply levels in the tank,” Ross says.

Knowing that this tank-checking system was impacting manpower and cost efficiencies, Ross approached Dave Blanchette, his distributor contact at The John W Kennedy Company, East Providence, Rhode Island. J W Kennedy has been a leader in supplying petroleum equipment in the New England region for more than 75 years.

From Blanchette, Ross learned about advancements in automatic tank monitoring and gauging, including the SiteSentinel iSite Automatic Tank-Gauging System from OPW Fuel Management Systems. Selecting a group of three bulk facilities that made the most logistical sense, Ross authorized installation in July 2008 of iSite and OPW's Petro Vend FSC3000 Site Controller equipment.

“We had three facets we wanted to accomplish at these upgraded locations,” Ross says. “First, we wanted to be able to authorize sales with a chip-key system. Second, we wanted the ability to temperature compensate our inventory and distribution. Finally, we wanted remote access to the gauging and inventory information.”

Improved accuracy

The iSite system was able to meet all of these requirements because it provides bulk plant operators with improved accuracy and versatility. The system is built on Windows technology that provides the horsepower that site operators need to ensure that sites are being managed as efficiently and effectively as possible.

The iSite system was developed to offer easy, low-cost installation; easy-to-manage user interfaces; highly accurate and precise tank-monitoring peripherals; easy reconciliation of inventories and deliveries; a variety of probe and sensor options; tracking of regulatory-compliance reporting; an easy-to-read LCD touch-screen with an icon-based menu structure; and the latest in communications technology that allows access to the system from anywhere in the world.

“We were also looking for a complete solution with the fewest number of vendors involved,” Ross says. “The nice part of OPW's hardware is that it accommodates some of the older legacy technology and does not require us to replace every module that we have been using when we upgrade a site. Also, the security and spill regulations are becoming more rigorous with each passing season and the OPW technology we're now using can help us meet those stricter regulations.”