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Why don't you use a dial-up internet connection?
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| Philip J. Baratz Angus Energy |
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It is nine o'clock on a Saturday (
sorry, no "regular crowd shuffling in"-you are just taking the kids to their soccer game
) and you load up the car. You start the engine and start to stare off into space, deep in thought. One of your kids asks why you aren't driving, and you respond, "I'm not sure if I have enough gas in the car. I filled up on Monday, but drove more than usual this week. Also, I waited outside in the car for a while when I picked you up from school after practice on Thursday, so I don't really know whether or not we need to go fill up with gas on the way to practice. You know what, let's just fill up-I don't want to chance running out." How does that sound for a situation that has
never happened on the way to soccer practice, but is a viable concern every day for oil dealers?
You can't imagine your $40,000 car not having a fuel gauge, but you are just fine with running a business serving thousands of customers counting on your ability to be sure that they don't run out of fuel, all without a gauge on your customer's tanks. There is, of course, a solution that you have chosen-you make more deliveries than you have to. Better to deliver 90 or 110 or 130 gallons into a 275 gallon tank, than risk that customer running out of oil. I get it, it makes sense-if only there was a better way. Everyone understands the fear of run outs and the importance of avoiding them. A study was conducted a few years ago indicating that customers are "not sure" that their dealers won't let them run out.
This is the part where the industry seems to diverge. On one hand, wouldn't a "better way" to make fewer and larger deliveries make a lot of sense? Wouldn't keeping trucks, drivers and dispatchers operating with optimal efficiency make sense for you, your employees and your customers? Sure it would.
But, wait, we already deliver efficiently. We target 175 gallons, and our average delivery is at 163 gallons. That isn't too bad, right? The K-Factor system that we have been using in our business since our grandfather founded it seems to serve us well. Yes, there are a lot of small deliveries, but very few run outs and, like I said, our guessing is pretty good! Ah, the good old life. Remember the life where a look in the eye and a handshake was all that you needed to decide that someone was credit-worthy? Remember when you had a room full of lateral file folders, each one representing everything you knew about a specific customer? The good old life might not have been that stressful, but it certainly was not overly efficient.
Welcome to 2016. We have iPhones, Waze and Amazon Prime. You have all of your data in a business software system (also referred to as BOS), much of it "in the cloud," hand-held computers in your trucks and many dispatchers use routing software. Yet, in most cases, you are still guessing how much oil is in the tanks that you deliver to on a daily basis. Considering the hoops that you are willing to jump through to save a penny or two per gallon on your cost of supply, isn't it time to address the single biggest operating category that you have-the cost of delivering fuel?
What would the impact be if you could save one delivery per customer per year? How about two deliveries per year? What would you do with that extra money-increase your take-home pay? Invest more in improving efficiencies? Lower your price while still maintaining profits so that you can increase market share? Simply make more money, and dramatically increase the value of your business in the event that you are considering selling? Yes, all of this sound good, but not enough work is being done to make them happen.
We did an extensive study of over 500,000 deliveries by 17 full-service oil companies in nine Northeast states. The goal of the study was to assess the efficiency of deliveries, both in gallons per delivery (in relation to the tank size), and to measure how accurate the deliveries were relative to the anticipated delivery size). The half-million deliveries were all into 275 gallon tanks and for customers who were on automatic delivery.
Grabbing all of the data directly from the BOS, using the BRITE platform, we noticed a number of things immediately:
- Though the target delivery size was 170 gallons, the average delivery was only 148 gallons.
- Very few deliveries were close to the "target delivery size"-meaning that the "average" didn't really tell the story. The story was that almost half of the deliveries (45%) were at least 30 gallons away from the average.
- While there were not that many deliveries that were very large and close to a run out, there were many deliveries that were so small that, after the cost to deliver, they ended up not being profitable.
In a somewhat misguided effort to make sure that a runout is a very rare event, you may have added over $100 per customer per year to the cost of operating your business. Larger deliveries save on driver, dispatcher and truck operating costs. They can also control mid-winter overtime costs and give customers more reason to be loyal to you.
If you were able to reliably and affordably monitor your customer's tank levels, you would not only be able to achieve some financial goals, but would also send a strong message to your customer about your use of appropriate technology and the importance to you of keeping them happy. Or...your competition can achieve those benefits and leave you playing catch up.
There are several companies who offer remote monitors. Our "Gremlin" monitor, offered by the Paygo division, is one of those in the marketplace. Our goal is to bring tank monitoring efficiencies and benefits to the marketplace. Your job needs to be recognizing the need for the monitors and then to seek out the company whose platform best meets those needs.
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Heat Oracle offers the first oil smart grid in the US
Local Bedford, NH residents, Greg Hovagim and Louis Trebaol, have chosen their Bedford community to launch their company,
Heat Oracle, which is creating the first heating oil smart grid in the country. The smart grid, according to a press statement, provides heating oil users with continent safety and efficiency monitoring (similar to what natural gas users have today) while leveraging the power of the group to lower the cost of heating.
As a nod to their local community and prior to a launch, Heat Oracle will provide a free three-month trial as a courtesy to fellow Bedford residents. The patent-pending product is a wireless sensor that attaches to an oil tank to monitor fuel levels and online tools that provide real time data back to the consumer. Once connected, consumers can check how much oil is in their tank with absolute accuracy, measure past usage and predict future use through Heat Oracle's mobile or web-based tools.
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New York city raises biodiesel blend
Mayor Bill de Blasio, New York City Council Environmental Protection Committee Chairman Costa Constantinides and representatives from the Oilheat and biofuel industries gathered for the signing of INT 642-A on Oct. 18. The bill will raise NYC heating oil's standard biodiesel component from 2% to 5% by October 2017 and incrementally to 20% by 2034.
For more information visit New York Oil Heating Association's website
here.
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Fuel Services introduces new fuel oil product
Fuel Services, home heating oil and propane Delivery Company, introduced its new product, B5 UltraClean. This new fuel is a blend of ultra-low sulfur heating oil, biodiesel and UltraGuard Advanced Fuel Treatment. In 2018, Massachusetts will mandate ultra-low sulfur heating oil, but Fuel Services has decided to start delivering now! It will provide a cleaner and more efficient resource for Western Massachusetts residents; lowering toxic emissions, nitrous oxide and greenhouse gas emissions and providing cleaner air for the region.
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R.W. Beckett-First Expo Sponsor for EEE 2017
 R.W. Beckett will mark its 80
th year in the heating industry as the first announced expo sponsor for the 2017 Eastern Energy Expo, taking place
May 21-25 in Hershey, Pa.
The Eastern Energy Expo, co-sponsored by the Oil and Energy Service Professionals, the Atlantic Region Energy Expo, and the Pennsylvania Petroleum Association, is the industry's signature annual event.
Beckett, a longtime partner with each of these organizations, is pleased to show its support for this combined trade show.
"These organizations have played a vital role in the education of our industry and this trade show provides an outstanding opportunity for us to demonstrate, educate and promote our products to our customers," said Jonathan Beckett, VP of Sales and Marketing for Beckett, based in North Ridgeville, Ohio. "It also provides a terrific venue for us to network and develop relationships with so many outstanding people and companies."
Beckett added: "Our goal in supporting the Eastern Energy Expo is to continue to show our support for and partnership with an industry that is an integral part of our company's DNA."
Other major sponsors are encouraged to join Beckett. There are also plenty of strategic sponsorship opportunities, in which companies can have their logo on official conference signage, as well as print ads, web ads, complimentary conference registrations, branded e-blasts and exhibitor booths.
Conference organizers are planning for more than 4,000 attendees at the premier trade show for the energy and comfort industries. Exhibitors are now reserving their booths for the two-day trade show on
May 23-24, showcasing all the latest products and services for the petroleum marketing and HVAC industry.
There will be more than 250 exhibits as well as a full schedule of technical and business sessions.
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Pennsylvania Petroleum Association urges
opposition
to the Financial Choice Act
PPA urges you to reach our to your members of Congress and oppose the Financial Choice Act. The
"Financial Choice Act" (HR 5983), passed through the House Financial Services Committee on September 13. Included in the bill is
language which would repeal the Durbin amendment.
PMAA
opposes attempts to repeal the Durbin amendment because it will allow more price-fixing of debit-card swipe fees. Reform of the fees has helped consumers save nearly $6 billion a year and supported about 37,000 jobs each year since the reforms went into effect in late 2011.
Repealing the Durbin amendment would be extremely harmful to retailers because it ultimately lowered debit card interchange fees, which are the second highest expense to a retailer, only behind labor.
PMAA and the Merchants Payments Coalition (MPC) supported the Durbin amendment's passage in 2010 and will continue to fight to ensure it is not repealed.
If you have not already done so, please urge your U.S. House members to oppose the "Financial Choice Act" so that it does not make it to the House floor for a full vote.
Click
Here to send a letter to your House member urging them to protect the Durbin amendment.
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Massey
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U.S. Boiler Company announced that Chris Massey, former Regional Sales Manager of the NY Metro Region has been promoted to Director of Sales, Eastern States. Massey will be responsible for directing the sales activities of U.S. Boiler's sales representatives in a territory that extends from Maine through central NJ. Massey brings 26 years of residential hydronic sales experience to the company's customers throughout the Northeast.
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Drew
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AHRI Appoints new Chairman
During its 2016 Annual Meeting in Scottsdale, Arizona, the Air Conditioning, Heating & Refrigeration Institute (AHRI) appointed Christopher Drew, Executive VP of Burnham Holdings, Inc., as its 2017 Chairman of the Board. Drew has served on the AHRI Board of Directors since 2008, and joined the Executive Committee in 2010. He has also held the positions of Treasurer and then Vice-Chairman.
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Rehagen
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The National Biodiesel Board names new CEO
The National Biodiesel Board has named Donnell Rehagen as the trade group's permanent
CEO. Rehagen was named interim CEO in June after serving 12 years as NBB's chief operating officer.
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Navien introduces remote access to water heaters and boilers
Navien launched NaviLink, which is designed to support remote access for all Navien tankless water heaters (NPE series), combi-boilers (NCB-E series) and gas condensing boilers (NHB series) through the new NaviLink Wi-Fi control and mobile app. Now, smart phone and tablet owners will be able to control temperatures remotely, access usage data, receive diagnostic notifications and remotely activate recirculation when paired with the HotButton accessory.
It is able to report and monitor diagnostic data through the companion app along with error code notification.
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VentCool-two solutions for free cooling
Field Controls has developed two VentCool systems to help contractors capitalize on free cooling and deliver energy efficiency. The VentCool Automated System "bolts on" to an existing forced air system and VentCool Whole House Fan works independently of the HVAC system. Both provide energy savings and fresh air ventilation. The VentCool Automated Free Cooling System is
completely automatic and works in concert with an existing forced air system via the Integrated Ventilation Relay Center (IVRC). Indoor/outdoor temperature sensors automatically signal ultra-quiet, positive seal dampers and engage the central fan to bring in cool air while exhausting warm air. The VentCool Whole House Fan includes six models that work independently of the central HVAC system. These self-contained units feature quiet, energy efficient ECM fans, insulated louvers and self-sealing dampers. Fresh air is pulled into the home through an open window or door and provides airflow from 884 CFM up to 4950 CFM. Insulated duct and ultra-quiet insulated fans help minimize noise. These fans are activated manually and can be equipped with a timer and automatic shut off switch.
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Biofuels, Biodiesel and Bioheat®
These three terms are being heard from every quarter of the oilheating industry. Often they are used interchangeably---this is not correct. Each one has a specific meaning and knowing the difference matters. Here are very short definitions to help keep them straight. These are not meant to be technical definitions, but a usage guide.
Biofuel: a fuel derived directly from living matter. Often used as a generic term that may include various fuels such as biodiesel or ethanol. Usually considered renewable.
Biodiesel: a very specific product produced in a very specific way to meet very specific specifications. The feedstock to create biodiesel can vary and may include soy oil or tallow. Here is what the National Biodiesel Board has to say about it: "a fuel comprised of mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats, designated B100,
and meeting the requirements of ASTM D6751." If not... it's not biodiesel.
Bioheat®: A registered trademarked name whose definition is a liquid fuel that is comprised of a blend of petroleum #2 distillate fuel (heating oil/diesel) and Biodiesel (see above). To meet the definition, the petroleum component must meet the ASTM D396 standard and the biodiesel component must meet the ASTM D6751 standard. If those two criteria are not met, it can not be called Bioheat®.
Remember, biodiesel is a biofuel but not all biofuels are biodiesel. Also, biodiesel is the only acceptable biofuel component in Bioheat®
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Gas Appliance Service/Timmie McElwain
Upcoming Training Sessions
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