Thursday, May 23, 2024


Under Key & Under Contract

by Rich Morahan, Richard Morahan Associates


Secure your delivery network to grow your profits

Your propane fuel delivery system is a network. There are three ways you can enhance the profitability and security of that network:

1. An Auto-Fill Contract ensures your customer a reliable, steady delivery at a predictable price. It assures you of a predictable demand to impact your own buys and operation.

2. A Tank Monitor Network tells you when to deliver fuel and your customer when to expect it. You can calculate degree days without a tank monitor system, but more and more operators are turning to tank monitor systems, which provide a continuous range of data for analysis. A tank monitor system takes the guesswork out of fuel distribution. You know when the level of each tank signals “deliver,” based on actual levels not on a formula. In fact, your customer can even install his or her own monitor — just by going to Amazon or another supply house. Supplying that device as part of a contract is a competitive advantage. There are numerous monitor systems on the market for propane tanks. Many include phone apps that allow a customer to track their levels. But with all this investment in hardware and a delivery system, you need to make sure that your fuel is the only fuel that hits that tank, leading to the third point on the network:

3. A Secure Propane Lock System. You want to control the network for your profits and your customer’s sense of comfort and convenience. And to do that, you need to lock your customer’s tanks. Unless you monitor the tank level of every customer all the time, there’s no way to know when a cut-rate supplier has topped them off.

How Sweet It Is

Sweetwater Propane of Ephrata, Pennsylvania is one supplier that added a lock system to secure its supply network. “We use a tank monitor system to monitor usage,” says Operations Manager Jesse Detweiler. “The Lock America Fill Valve Lock ensures that the customer sticks to the contract. Our customers are always supplied with propane, and only Sweetwater Propane delivers it.”

Secured tank monitoring is an integral component of Sweetwater programs that enhance customer service while building company revenue. A group buying program, for example, allows a group of customers in an area to pool their purchases and orders through a group leader for additional discounts. The customer benefits from reduced costs, and Sweetwater benefits from efficient delivery.

Like the group buying program, Sweetwater’s website is designed to enhance the customer experience. Customers can open an account, download forms, order propane, monitor their account, pay bills and renew their contracts.



High-Stakes Anti-Piracy

Other suppliers initially employed locks for obvious reasons to address a common problem: unauthorized fill-ups. Brian Wanner of Silvertip Propane of Billings, Montana is one of many operators who choose to lock their tanks. “When a customer got behind on his bill, he often went shopping around for a competitor to fill our tanks,” Wanner said. “This of course is illegal. We were losing business when they shopped around for free credit. Now we lock the fill valve and the outlet valve when customers owe us money. Profits are up.”

Before the widespread use of monitoring systems and auto-fill contracts, pirate operators were merely impacting your fuel revenue. With the additional investment in setting up an auto-fill and network program, there’s a lot more lost than just the revenue from a few fuel deliveries.

“A Win-Win Proposition”

As I’ve written before, “Auto-fill contracts are a win-win proposition. The supplier can project its deliveries and purchases, while the customer can be assured of enough propane.” The auto-fill contract and monitor system enable the supplier to strengthen ties with its current customers; the system also provides a sales and marketing edge to attract new customers. The security lock program, the final step in customer compliance, holds this network together.

It is crucial to choose a locking system like Lock America’s to secure your network. Lock America manufactures a heavy duty brass and chrome lock specifically designed for the fill valve of a propane supply tank. The cap fits over a slip ring, and protects against tampering and harsh weather. Each lock is keyed to the individual customer, so a driver only needs one key for a route. Lock America registers each key code for secure, fast replacement, so operators can order additional locks and keys with the same code.

If you are negotiating auto-fill contracts and investing in a monitor network, don’t forget to secure your tanks.

Rich Morahan writes frequently on security for the ATM, petroleum, propane and vending industries. He can be reached at 617-240-0372 or rmwriteg@gmail.com.

Propane Tanks
Fleets and Fuel Delivery
Tank Monitors
July 2021

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