NY company reads fill levels remotely to maintain delivery efficiency while avoiding run-outs.
Remote tank monitoring can be a powerful tool in the hands of an ambitious energy marketer. Just ask Ryan Lane, Operations Manager at First Fuel & Propane. The Hudson, N.Y., company is expanding aggressively by adding business in areas up to two-and-a-half hours away from its base of operations. “Without remote monitoring, there is no way we could do this,” Mr. Lane said.
First Fuel has partnered with Independent Technologies and deployed about 3,000 Wesroc tank monitors to transmit tank fill data to its back office software. Mr. Lane told Oil & Energy that the monitors support the company’s goals of delivering propane efficiently while preventing run-outs and projecting a high-tech image that attracts new customers.
A Company With a Plan
First Fuel is a 22-year-old company that delivers both heating oil and propane. Recent expansion has pushed the customer base to more than 5,000 fuel delivery accounts, and the company’s business is split about 80/20 between propane and heating oil. “Propane is more the future than oil,” Mr. Lane said. “Oil is contracting, and propane is expanding. We focus our oil business in a small area, because the returns are less.”
The company started with one 30,000-gallon propane tank in Hudson and has since added another 120,000 gallons of storage across the street from headquarters. With two additional strategic storage locations, First Fuel has more than a quarter million gallons of propane storage.
The company is delivery-only but satisfies customers seeking full service by recommending local heating and cooling contractors that it has vetted. “We work with independent contractors who do the indoor stuff,” Mr. Lane explained. “We find that works better for us. We do all we can to pump product and deliver to as many homes as we can.” Some customers use contractors recommended by First Fuel, while others have their own contractor relationships.
First Fuel owns most of the propane tanks that it fills and employs technicians to set the tanks and lines and perform maintenance. “We try to retain ownership. It makes it easier for liability, because we can make sure the leak tests are done and that the regulators are replaced when they need to be,” he said.
The company’s delivery area covers a vertical slice of eastern New York State spanning nine counties on either side of the Hudson River: Albany, Columbia, Dutchess, Greene, Rensselaer, Saratoga, Schenectady, Warren, and Washington. The vast majority of customers are on automatic delivery, although First Fuel will accept will-calls if the customer insists.
Tracking Tank Levels
First Fuel’s partnership with Independent Technologies is the culmination of 15 years of trial and error with different monitoring systems. “We had been trying a lot of different monitoring companies, but the technology was not there,” Mr. Lane said. “We spent a lot of time waiting for the technology to catch up.”
The company recently committed to Wesroc monitors after evaluating its hardware options. “We talked to some Wesroc customers, and they seemed to be the best,” Mr. Lane said. “You have to take a leap of faith and jump in with both feet. There is simply no way to be as efficient without monitors.”
First Fuel uses monitors on the majority of customer tanks, with the only exceptions being highly predictable accounts such as those using propane only for domestic hot water. The monitors use cellular transmission wherever service is available and satellite transmission in more remote areas.
Mr. Lane said the tank monitors set First Fuel apart from its competition, because the company is able to expand aggressively while keeping delivery costs low and maintaining an excellent image bolstered by newer vehicles and exceptional reliability.
“We went to a full monitoring system so that there would never be any interruptions for the customer. In the Adirondacks, a lot of our accounts are second homes. People are not there all the time, and many of them have had issues with run-outs in the past. If you are not monitoring the tanks, the only way of keeping them full is basically an educated guess. Sometimes the usage varies, and the monitors read the level every day, and we have found that that is pretty much the most important thing for customers. Now I don’t care how they use their fuel. They can be as variable as they want, and we can still keep up with them.”
First Fuel strives to provide customers with an ideal balance of price and performance. “We make sure to keep our prices down, to never let them run out of gas, and to always arrive with a clean truck and a clean driver in a uniform,” Mr. Lane explained. “We want to keep our customers satisfied, whether it is with reliable deliveries or good customer service on the phone. Our phones are answered by human beings who know what they’re talking about. Our entire staff is certified for propane, and we’re local, which matters to people. It is a lot less expensive to keep an account than to get a new one.”
Tank monitoring literally helps Mr. Lane sleep better, because he is rarely awakened in the middle of the night with emergency calls. “It brings the stress level down. Without he monitors we could not expand as fast we did. It would have been too much,” he said.
A Commitment to Technology
Tank monitors are one link in a technology chain that First Fuel has built to improve its business processes. The monitors transmit tank fill data nightly to the servers at Blue Cow Software, which provides First Fuel’s back office software. Blue Cow flags all tanks that are about 25 percent full, which is the fill level that First Fuel targets for delivery. Once the day’s deliveries are identified, the data is ported to the Digital Dispatcher route-optimizing software, which creates routes for First Fuel’s drivers. The day’s deliveries are sent to an onboard computer, which serves them up to the driver, complete with turn-by-turn directions.
“We have always believed in technology and always been on the cutting edge,” Mr. Lane said. “We haven’t had any paper tickets for 10 years. As soon as a technology was available we started using it. We have been guinea pigs, and it’s not always a smooth ride. In the past few years I would say the technology has finally caught up with our desires, and it has become smoother.”
The various technological tools combine to provide essential support for growing the business. First Fuel has expanded its propane delivery northward and established storage locations in Troy and Warrensburg that serve as bases for First Fuel delivery vehicles. The company has installed two 30,000-gallon propane tanks in Warrensburg and one 30,000-gallon tank in Troy.
The combination of remote monitoring and route optimization has made it possible for First Fuel to expand successfully. “Without the monitors it would be a tough transition. You’d have people running out of fuel and being unhappy about it and drivers chasing run-outs, which is inefficient,” Mr. Lane said.
The company staged its northern expansion by marketing in the Adirondacks and acquiring customers and then adding the Warrensburg storage in 2014 to service the new accounts efficiently. “When we started up there, we were driving for an hour and a half before we reached the first customer,” he said.
A High-Tech Image
First Fuel wears its technology proudly. The company tagline is “High Tech, Low Cost and Incredibly Reliable”, and the company references tank monitoring throughout its marketing. There is a description of the Wesroc monitors on the First Fuel home page, and the company’s TV spots mention them prominently. In one commercial, company owner Richard Coon says, “Why be part of the First Fuel Buyers Club? One reason: At First Fuel, we give any customer a state-of-the-art tank monitoring system—a $400 value, for free. What does that mean to you? You get to pay for the fuel when you need it, not when we want to ‘top off’ your tank.” (He makes air quotes and assumes a sarcastic tone when saying “top off”.)
“Customers don’t like to run out of gas, even if they are monitoring it,” Mr. Lane told Oil & Energy. “If they are heating their place for one month and then going away for the next month, there is no way for a company to keep up with that without making inefficient deliveries or having run-outs. Tank monitors allow us to avoid run-outs and delivery efficiently.”
“Most people don’t want to be worrying about their fuel tank or thinking about checking the gauge,” he added. “We try to have it be as hands-off as possible. You almost want customers to forget about you.”
First Fuel recently completed an acquisition plan and is currently seeking to expand its footprint.
