Fuels Market News Magazine Winter 2021

WINTER 2021

1 2O2 0

LOOKING AHEAD

Four industry leaders share their outlook for 2021 in a post-pandemic marketplace.

In the Lead:

NACS Treasurer Jared Scheeler

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WINTER 2021

24 Looking Back— COVER STORY

and Ahead

Industry leaders share how COVID-19 affected their businesses and their outlook for 2021.

By Keith Reid

32

Generating Opportunity The generator fueling market offers high margins and stability and requires a high level of customer service.

By Keith Reid

40

In the Lead NACS Treasurer Jared Scheeler shares why advocating for the convenience and fuel retailing industry is nonnegotiable for him.

By Keith Reid

FuelsMarketNews.com

FMN Magazine WINTER 2021 | 1

04 From the Editor 06 NACS News 08 Fuels Institute 10 Fueled for Thought RETAILER OPERATIONS 12 H ow Can You Operate a Gas Station Without

Any Gas? Control your paperwork and stay in compliance to avoid finding out.

12

14 C OVID-19 Fatigue—From Shock to Acceptance

Adapt to fewer transactions and category churn to win trips.

COMMERCIAL FUELS 16 How a Universal Fuel Card Can Lower

Fleet Expenses Understand the cost of having drivers travel out of their way to use specific brands.

16

FUEL MARKETERS 18 O de to the Bulk Plant

These facilities are the backbone of the petroleum marketing industry.

20

ey Metrics to Improve Fuel Sales K Here are five of the most common and important KPIs for fuel and oil marketers to track.

46 Industry News 52 Remember This?

18 2 | FMN Magazine WINTER 2021

FuelsMarketNews.com

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© 2020 Dover Fueling Solutions. All rights reserved. DOVER, the DOVER D Design, DOVER FUELING SOLUTIONS, and other trademarks referenced herein are trademarks of Delaware Capital Formation, Inc./Dover Corporation, Dover Fueling Solutions UK Ltd. and their affiliated entities, registered in the United States and various other countries. 4th-DEC-2020

FROM THE EDITOR

Happy New Year With New Initiatives Welcome to 2021. I will add the now ubiquitous refrain—let this year be far better than the one that proceeded it.

It seems to be starting off as much the same on the COVID-19 front, so we will have to see how that all turns out.

A little closer to home, I can honestly say that 2021 should be an exceptional move ahead for Fuels Market News. A significant amount of effort is being put into updating our print and digital publications, and there are several initiatives to improve the experience for our well-appreciated audiences that we will be announcing shortly. I can mention one now. We have established an Editorial Council composed of four marketers/retailers and four industry solution providers.

We have already locked down the marketer/retailer segment. They are a diverse and exciting mix of industry professionals, and we were able to get their input for our cover feature, “Looking Back—and Ahead,” where we review 2020 and get some insight on what to expect going into 2021.

We have Brad Davis, managing partner/owner of Mobile Force Refueling, a leading mobile fueling operator out of the Phoenix area. Davis provides some additional insight on generator fueling in our article covering that business model on page 32.

Also on the council is Brad Douglass, who is the CEO of Sherman, Texasbased Douglass Distributing, which operates a range of marketing and retail operations.

Scott Minton, the business development director for Stillwater, Oklahoma-based OnCue, is one of our new council members. OnCue is a growing innovator in the Oklahoma convenience store market.

And there is Jared Scheeler, a founder of The Hub convenience store chain. The Hub has established itself as an upscale convenience chain, with six locations operating in western 4 | FMN Magazine WINTER 2021

We have established an Editorial Council of four marketers/retailers and four industry solution providers.

North Dakota’s Bakken oil region. He is also profiled on page 40 for his government relations leadership efforts.

We are close to locking in the final supplier member and will cover the full council in greater detail in the spring issue.

Looping back to Scheeler, it was fitting to highlight that aspect of industry involvement—supporting government relations efforts—in this issue’s “Remember This?” column.

This is where we dig into the historic NPN Magazine’s archives for issues and events that helped shape the industry. NPN started in 1909 as “the voice of the independent oil industry.”

That initially involved battles against Rockefeller’s Standard Oil but quickly expanded to numerous initiatives at the local and federal levels as the industry came of age. It is a good read to see how what is so important today has always been critical to the success of our industry.

EDITORIAL Keith Reid Editor-in-Chief (847) 630-4760 kreid@fmnweb.com Kim Stewart Editorial Director (703) 518-4279 kstewart@convenience.org Sara Counihan Managing Editor (703) 518-4278 scounihan@convenience.org CONTRIBUTORS John J. Kimmel, Stephen Lasky, Joe O’Brien, Brian Reynolds, Roy Strasburger, Mike G. Zahajko DESIGN Beyond Definition www.beyond-definition.com

ADVERTISING Ted Asprooth (847) 222-3006 tasprooth@convenience.org

PUBLISHING Erin Pressley Publisher (703) 518-4208 epressley@convenience.org Rose Johnson Audience Development and Production Manager (703) 518-4218 rjohnson@convenience.org Fuels Market News Magazine is published quarterly by the National Association of Convenience Stores (NACS), Alexandria, Virginia, USA. Subscription Requests: circulation@fmnweb.com POSTMASTER: Send address changes to Fuels Market News Magazine, 1600 Duke Street, Alexandria, VA, 22314-2792 USA. Contents © 2021 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria, VA, and additional mailing offices.

1600 Duke Street, Alexandria, VA, 22314-2792

Keith Reid is the editor-in-chief of Fuels Market News.

He can be reached at kreid@fmnweb.com.

PUBLISHED BY

FuelsMarketNews.com

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The Costs of Reducing Emissions

As governments consider strategies to reduce emissions from transportation, a new Fuels Institute report provides valuable context to help guide their considerations, encouraging them to consider multiple perspectives before deciding how to proceed. “Impact of Transportation-Related Environmental Initiatives” takes an in-depth look at the relative effectiveness and associated costs to society, government, industry and consumers of 14 distinct transportation movements, including those focused on emissions, fuel economy and carbon pricing; alternative fuels; congestion pricing, tolls and telecommuting; and mobility.

“As the world continues to focus on the transportation-energy sector to positively impact the environment, we commissioned this report to provide a resource to help policymakers and stakeholders better understand the menu of options available,” said Fuels Institute Executive Director John Eichberger.

The report compares 14 movements in the areas of effectiveness, impact and cost over the next 20 years (2020–40). Effectiveness is a weighted average measure of emissions, fuel economy and vehicle demand in terms of shift to alternative powertrains; impact is defined by whether the movement is nationwide, 6 | FMN Magazine WINTER 2021

prevalent in some states or limited to only a few regions or cities; cost includes those incurred by industry participants and/or consumers to comply with a movement.

“The report found a correlation for most movements between their effectiveness for reducing emissions and their overall cost—the more expensive an initiative, the more effective it might be, with some exceptions,” Eichberger explained.

Additionally, the report found that policies promoting vehicle electrification seem to yield significant emissions reductions but carry with them similarly significant costs. Those policies addressing biofuels yield moderate emissions reductions coupled with moderate costs. Meanwhile, some policies like telecommuting yield modest emissions benefits with minimal associated costs. “What becomes clear when evaluating the various options available is that there is no silver bullet—every initiative comes with offsetting compromises,” Eichberger explained.

The “Impact of Transportation-Related Environmental Initiatives” report is available at www.fuelsinstitute.org/ research. You also can find an overview of the full 37 movements considered for this report.

FuelsMarketNews.com

PHOTO©ISTOCK/LUCKYRACCOON; ARTISTEER

The Fuels Institute compares 14 initiatives in terms of effectiveness, impact and overall expense.

Coming in Last

The Last Mile Among convenience retailers NACS surveyed…

57%

offer some form of last-mile fulfillment

68%

began delivery services due to COVID-19

10%

offer pump-side orders for in-store pickup

Long-term, which technologies and solutions are truly facilitating growth in the last-mile landscape? And near-term, how much will the coronavirus pandemic continue having an impact on these services within the convenience retail industry? In mid-2020, NACS Research surveyed convenience retailers globally to answer these questions and collect insights for creating or enhancing a last-mile fulfillment strategy.

In October 2020, NACS Research released the resulting global benchmarking study, “Last Mile Fulfillment in Convenience Retail,” which delves into four key areas: • How readily convenience retailers are adopting last-mile fulfillment • Current and anticipated use of delivery services • Retailer options for accepting orders • Difficulties retailers face with adopting last-mile services

SOURCE: NACS LAST MILE FULFILLMENT IN CONVENIENCE RETAIL WWW.CONVENIENCE.ORG/LASTMILE

In terms of adoption, more than half of all of convenience retailers (57%) currently offer some form of last-mile fulfillment.

Patrick Loftus, NACS survey research manager, noted that three-quarters of the retailers surveyed are North American-based, and that roughly 68% mentioned that they did begin offering these services in response to COVID-19.

“Clearly it’s top of mind for a lot of retailers right now, who are looking at lastmile fulfillment in any way to increase traffic as much as possible,” he said in a Convenience Matters podcast, “Winning the Last Mile.”

Across the globe, however, retailers approach last-mile fulfilment in different ways. “The story in Europe and in Australia is somewhat different, where we are seeing a higher level of last-mile adoption,” said Loftus, noting that these retailers are higher adopters of third-party lockers, while North American retailers are more apt to offer curbside pickup.

Read more findings from the NACS last-mile survey at www.convenience.org/lastmile.

FuelsMarketNews.com

FMN Magazine WINTER 2021 | 7

When It’s Love

BY JOHN EICHBERGER

T

he road is calling and I must go. Those are the words on the framed poster above my desk, hovering above the image of a Porsche 911 cruising on a winding mountain road. The open road has been a siren’s call for me my entire life—but that draw, that love affair with cars and driving that has been so strong throughout America’s recent history, seems to be fading away… especially among younger generations who are more drawn to technology than shiny objects on wheels. That, however, could represent an opportunity for the auto industry to regain some of its appeal.

FEELS SO GOOD In early October, I followed the message on that poster and took a two-day trip in my manual-transmission-equipped 2003 Porsche 911 and hit the winding mountain roads of southwest Virginia, losing myself with my first true love—driving.

As I carved around hairpin turns, stomping on the breaks, flicking the gear shift and hammering down on the gas pedal, the power and insight of Van Halen took over. I did not have to ask “When It’s Love”—it was “Right Now,” and I became one with the vehicle and the asphalt below me.

THE DREAM IS OVER I know I sound like my parents, but things have seriously changed. The manual transmission in my vehicle is a dinosaur—less than 2% of vehicles produced in 2019 were equipped with three pedals on the floor, and only 11% delivered power to the rear wheels. When I started driving, stick shifts at least were still found in 27% of new vehicles, and rear-wheel drive was found in 30%. So many features of modern vehicles have taken control away from the driver. While this has without a doubt improved efficiency and safety, I believe it also has contributed to commoditizing the transportation experience and eroded that connection between car and driver.

I’LL WAIT In 2014, the Fuels Institute published “Driver Demographics—The American Population’s Effect on Vehicle Travel and Fuel Demand.” The trends highlighted in the report lead me to assume more and more kids are saying “I’ll Wait” with regards to getting their driver’s license. It showed that the number of Americans in their 20s who possessed driver’s licenses had dropped from 91% in 1982 to 81% in 2012.

It also showed that the percentage of U.S. vehicle miles traveled driven by those under the age of 34 had declined from 45% in 1983 to just 29% in 2009.

Except for those older than 60 years, every age group has seen a decrease in the percentage of its population with a driver’s license. And it is especially pronounced among teenagers, where fewer than 50% of those 17 years of age have a license.

EVERYBODY WANTS SOME There are a few reasons why young people are not driving as much, including changes in teen licensing and driving laws in many states, as well as the high

8 | FMN Magazine WINTER 2021

cost of vehicles, fuel and insurance.

I also submit that today’s youth need not travel to interact with one another—they can do so virtually through technology.

According to a 2018 survey conducted by Common Sense, a nonprofit that researches kids and their relationship to media and technology, the share of 13 to 17 year-olds who have their own smartphone increased from 41% in 2012 to 89% in 2018.

Common Sense also found than teens spend on average more than seven hours every day on screen media for entertainment (not counting virtual schooling). And Pew Research Center found that 60% of teenagers say they get together with their friends online every day, outside of school activities; by contrast, only 24% visited friends in person every day.

BEST OF BOTH WORLDS But there is potential opportunity to reignite an attraction to vehicles. The new vehicles entering the market are loaded with technology, and this trend is expected to accelerate. The successful features installed in new electric vehicles (e.g., large touchscreen control modules) are being installed in combustion engine vehicles with very high penetration rates. Newer vehicles are beginning to resemble rolling computers. I believe technology-focused younger buying cohorts will pay attention and respond positively.

WHY CAN’T THIS BE LOVE? The love affair with our vehicles that has existed in the past focused on style, performance, handling and speed. Why can’t a new love affair be inspired by vehicle infotainment systems and the ability of the vehicle to keep drivers connected with their social networks (which itself increases the value of continually improving advanced driver assist systems)? And FuelsMarketNews.com

Most Popular Installed Electronics (Mid 2020) Satellite Radio Android Auto Apple CarPlay USB Interface Voice Recognition Phone Connectivity 7 - 12 Inch Screen Multi-Info Display

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

SOURCE: WARDS INTELLIGENCE

Percentage of Teenagers with Driver’s License, by Age

1978

1988

1998

2008

2018

100%

80%

60%

40%

20%

16

17

18

19 SOURCE: FEDERAL HIGHWAY ADMINISTRATION

maybe while they are enjoying the new tech features, they will experience some additional joy in exploring the world around them while navigating their vehicles.

Until then, I will continue standing on “Top of the World” and “Running with the Devil,” enjoying every moment behind the wheel and creating memories that can “Take Me Back (Deja Vu)” to the hey days of America’s love affair with our cars.

FuelsMarketNews.com

And to Eddie Van Halen, who recently passed, thank you for the soundtrack.

The Fuels Institute, founded by NACS in 2013, is a non-profit research-oriented think tank that evaluates market issues related to vehicles and the fuels that power them, incorporating the perspective of diverse stakeholders to develop and publish peer-reviewed, comprehensive, fact-based research projects.

John Eichberger is executive director of The Fuels institute. For more information, visit www.fuelsinstitute.org.

FMN Magazine WINTER 2021 | 9

FUELED FOR THOUGHT

Hidden in Plain Sight Alleviating information overload gives fuel marketers a competitive advantage.

BY JOE O’BRIEN

T

he hustle and bustle at today’s convenience stores is in stark contrast to the filling stations of yesteryear. Unfortunately, the gradual evolution of fuel stations has allowed a serious customer-facing problem to creep onto the forecourt: information overload.

Back when full-service fueling was still commonplace in all states, the experience of going to a gas station felt completely different than it does today.

Comparatively, the convenience store was muted, and the process of getting fuel for your car evoked an extension of car maintenance. When you pulled into a “service station,” an attendant not only fueled your car but also cleaned your windshield and checked your oil. The attendant also was there to ensure the fueling process was completed safely.

Fast forward to today. Information saturation is a pervasive part of life. When motorists pull into a station, they are greeted by a barrage of product choices, promotions and safety information. What are today’s consumers most likely to pay attention to? In theory, everyone should be concerned about safety first and foremost, but in practice that isn’t likely the top consideration for most consumers.

10 | FMN Magazine WINTER 2021

Although all stations communicate safety information and other critical messages, most of them are doing it ineffectively. More than ever, fuel marketers need to adapt operations to help consumers see not only what crosssale promotion or loyalty program will improve their experience but also better educate them about their fueling choices and fuel site safety practices.

With that in mind, here are three information overload problem areas that need to be addressed and a look at how equipment innovation can help solve them.

1. Safety Information. If we polled a group of drivers, how many would know what to do in the event of a fuel spill at a gas station? How many would even know an emergency shut-off switch exists?

The odds of a commercial airline crashing are reported to be (conservatively) about 1 in 5 million, and yet, airlines review safety protocols with their customers at the beginning of every flight. While the chances of an incident on the scale of a plane crash happening at a fuel site may be remote, a serious incident that risks lives or jeopardizes the environment is not.

Especially in this age of distracted driving, it’s time for fuel marketers to take a more assertive role in teaching customers how to respond if an incident occurs. Engaging customers in a more meaningful way to understand their role in this shared responsibility is an essential step forward to creating a place of business that is consistently safe and compliant.

2. Fuel Identification and Selection.

With the introduction of biofuels, motorists are faced with more choices FuelsMarketNews.com

PHOTO©ISTOCK/CHAIWATPHOTOS

than ever, and selecting a compatible fuel is not as easy as it used to be.

Retail fuel dispensers now offer multiple product choices, and at most stations the product mix can vary from dispenser to dispenser. For instance, some dispensers may offer the traditional three grades of gasoline, while one or two dispensers may also offer diesel, higher ethanol blends or even ethanol-free gasoline. Forcing customers to drive around to find the fuel they wish to purchase compromises the safety of everyone on the forecourt.

Inconsistent terminology for labeling grades of fuel further complicates the selection process. E15 is sometimes labeled E15, Unleaded 15, Unleaded 88 or even Regular 88. Diesel dispensing equipment might be colored yellow, green or black. This approach to fuel identification makes it harder than is necessary for a customer to find and select the appropriate fuel and increases the chance of putting incompatible fuel into a vehicle.

3. Fuel’s Competitive Advantage.

Truly understanding what makes one fuel different from another, let alone what makes one better than another, is a hazy proposition—even for many people who work in the fuel industry.

What does the octane rating really mean? What role does a fuel’s energy density play? Are there detergents in the fuel, and what do they contribute?

With all of this to consider, and very little educational information available at the fuel island to guide product selection, most customers are not making truly informed product choices.

Fuel marketers who help their customers better navigate their fuel choices will help them understand—and FuelsMarketNews.com

appreciate—the value they are getting from that station’s fuels. This will not only help boost brand loyalty, it will likely help improve consumers’ perception about the value that petroleum-based products bring to the table.

TECHNOLOGY TO THE RESCUE Equipment innovation has long been a cornerstone of advancing fuel site safety, while simultaneously improving the customer experience. Today, a potential solution to information overload at the gas station can be found with the primary customer interface on the forecourt: the fuel dispenser. Most fuel dispensers today are cluttered with warning stickers, product identification information and promotions amid a host of payment and media platforms.

New dispenser technologies may help customers cut through that clutter.

At a minimum, media platforms could play videos that educate customers about fuel and safe fueling practices. New touchscreen user experience platforms that combine media, fuel selection and more may hold the key to guiding customers through informed product selection and educating them about safety procedures in a more engaging way. The user experience can be personalized on these new platforms, which will help marketers give their customers a more positive experience.

Stations that empower customers to cut through all the noise, make educated purchases and engage with station equipment safely, will not only position their operation to generate repeat business through improved brand loyalty but also will create a safer place of business overall.

If we polled a group of drivers, how many would know what to do in the event of a fuel spill at a gas station?

How many would even know an emergency shut-off switch exists?

Joe O’Brien is vice president of marketing at Source™ North America Corporation. He has more than 20 years of experience in the petroleum equipment fuel industry. Contact him at jobrien@sourcena.com.

FMN Magazine WINTER 2021 | 11

RETAIL OPERATIONS

How Can You Operate a Gas Station Without Any Gas? Control your paperwork and stay in compliance to avoid finding out.

BY ROY STRASBURGER

I

promise that this is not a trick question about alternative fuels, online retailing or robots. It is a meditation on a situation that we came across recently and, sadly, happens quite often in the fuel industry.

Our company, StrasGlobal, provides contract site operations for retail stores around the country. Basically, our job is to operate a site at or above industry standards for a fee.

The situation I’m referring to started when we were contacted by someone who had just bought a small group of convenience stores. The previous owner had been struggling, and the new owner, our client, wanted to get 12 | FMN Magazine WINTER 2021

into the retail business. He felt that by putting some capital into the stores, and with a good operator in place, he could turn the business around.

We found what we normally find— decent stores suffering from neglect: dirty floors and windows, outdated foodservice offerings and sparsely stocked shelves. There were trash and weeds around the building and on the grounds.

Most of the outside lights, and quite a few inside ones, were burned out.

We also found that the fuel tanks were empty.

This is not unusual for us. Operators will often sell down their fuel and store inventories to get the most cash

out of the business before they leave.

However, in this case, we could not get the local jobber to fill the tanks. After a little digging, we found the problem.

The previous owner recently had a death in the family and ended up spending time away from the business. During that period, the fuel delivery permits for the site expired, and the USTs had not been inspected.

The fuel supplier could not deliver product because it is against the law to deliver fuel into tanks that have not been certified.

The previous owner said the certification had slipped his mind and that he wasn’t aware that it had expired.

This incident started a chain of events that impacted the sales and profitability of the store. I’m not going to say it was the cause of the stores originally being sold, but it did affect the new owner because it took us time to get the tanks inspected and certified before we could start selling fuel again.

The cash flow for the new owner was lower than he had planned due to the delay in opening the pumps.

FuelsMarketNews.com

PHOTO©ISTOCK/SMOLAW11

RETAIL OPERATIONS

I’ve often heard about retailers who have lost sales because they have either forgotten about renewing a permit or have misplaced a license and had to apply for a new one. These situations also can lead to fines, suspensions and even criminal prosecutions.

Frankly, staying in compliance is one of the things that keeps me awake at night (another is the dog next door, but that is a story for another time).

The fuel and convenience industry is one of the most regulated retail businesses in the country. I firmly believe that as we come out of the COVID-19 pandemic we will see more regulations to protect the public’s health and to control the spread of future viruses. You will need to keep up with the paperwork for these new requirements in addition to what you are doing at the moment.

The best way to stay on top of your permits and licenses is to follow these three steps: Gather. Collect all of the permits, licenses, certificates and registrations that affect your business. Every piece of paper that is issued by a government office, or needs to be available for inspection, should go in the folder.

Organize. Once you have all your information in one place you need to organize it. Find out which documents need to be renewed and their expiration date. Once you’ve established the expiration date, count back 60 days to determine when you need to start the renewal process. Go through the steps you will need to complete to renew.

What kind of information will you FuelsMarketNews.com

have to provide? Do you have to do any maintenance work or an inspection prior to renewal? How much is the fee? Do you have to do the renewal application in person, or can you renew by mail or online? All of these things are going to help you decide what your timing should be.

Store. After you’ve gathered all of the information and organized it into an actionable plan, you need to store your documents and permits in a place where they are safe and you have easy access. In some jurisdictions, you have to display the original document on the premises. In others you can display a copy. In still others you don’t have to display the document, it just needs to be available when requested.

Regardless of the requirements, take either the originals or copies of the originals and put them in a safe place.

Although these three steps sound relatively easy and straightforward, they are a hassle and, frankly, tedious.

It is difficult enough to manage this for one store. Imagine trying to stay on top of every document for a small chain of stores. We know. After years of trying to keep up with our business-critical documents we created a software program, Compliance Safe, to handle the paperwork.

You have enough to worry about with things out of your control: competition, weather, costs, staffing and COVID-19. However, you can control your paperwork and make it a non-issue. You can take worrying about the local government off your list.

Operators will often sell down their fuel and store inventories to get the most cash out of the business before they leave. However, in this case, we could not get the local jobber to fill the tanks.

Roy Strasburger is the president of StrasGlobal. For 35 years StrasGlobal has been the choice of global oil brands, distressed assets managers, real-estate lenders and private investors seeking a complete, turnkey retail management solution.

FMN Magazine WINTER 2021 | 13

RETAIL OPERATIONS

COVID-19 Fatigue— From Shock to Acceptance Adapt to fewer transactions and category churn to win trips.

BY MIKE G. ZAHAJKO

C

OVID-19 cases on the rise!

Go directly to jail. Do not pass go, do not collect $200!

Unfortunately, this sounds less like a Monopoly Chance Card and more like a news headline.

New terms like “COVID fatigue,” “coronavirus burnout” and “pandemic fatigue” have entered the English lexicon and are now trending. These phrases capture the stress, fear and angst of dealing with the worldwide 14 | FMN Magazine WINTER 2021

pandemic at home and at work. While the c-store and petroleum industry is often praised as “recession resistant,” industry data show that the business is not entirely COVID-19 resistant.

According to a recent COVID-19 Impact on Consumer Behavior report from PDI and NACS, c-store trips remain down about 12% versus a year ago. At the start of 2020, optimism was highest in foodservice growth as a category. Unfortunately, foodservice

growth has stalled, and the category is down about 13%.

Vehicle miles traveled are also down and may likely stay down in coming years. A forecast from KPMG suggests that the miles traveled will settle at about 90% of pre-pandemic levels.

With transactions, key categories and vehicle travel down, where is the silver lining, and how can business leaders adapt?

A PATH FORWARD When an individual experiences significant loss, moving forward can seem impossible. It is safe to say our customers and employees are all dealing with loss due to the pandemic. That loss may be personal, professional or financial.

With that loss comes grief.

The path forward from the grief and loss caused by COVID-19 may likely FuelsMarketNews.com

RETAIL OPERATIONS

PHOTO©ISTOCK/DRAZEN ZIGIC

be the same path used for overcoming any grief as outlined in the “5 Stages of Grief” first proposed by Elisabeth Kübler-Ross in 1969.

Everyone can likely identify their current emotion or stage as being one of the five classic stages of grief: denial, anger, bargaining, sadness and acceptance. Kübler-Ross points out that the stages do not necessarily occur in order, but that all five are usually experienced in coming to acceptance.

The impact of these stages can be seen in c-store consumer behavior post-COVID-19. Despite the drop in customers, sales of candy and alcohol are up. Candy and alcohol are common companions for anyone dealing with grief.

The PDI/NACS study shows that c-store shoppers are buying more each visit and that the average in-store transaction is up about 17% over a year ago, which is another positive indicator. Due to the increase in basket size and the gradual return in trips, in-store sales have remained positive through most of the pandemic. As an essential business, c-stores have the opportunity and challenge of remaining open despite the recent resurgence of COVID-19 cases nationwide.

BEST PRACTICES TO SATISFY CONSUMER NEEDS To remain open and attract customers, retailers must continue to provide a clean and safe shopping experience both inside the stores and at the pumps. According to gasBuddy’s third-quarter 2020 report on consumer behavior, “stations with above-average FuelsMarketNews.com

cleanliness ratings drove 21% more visits than their below-average competitors, up 5% points compared to Q2.” Clean stores attract more customers because they convey safety and security.

Flu season is here. The U.S. Centers for Disease Control estimates that 38 million Americans were sick with the flu last season, and public concern is even higher this year as COVID-19 cases hit record numbers.

In addition to frequent cleaning, the CDC recommends disinfecting hightouch surfaces. Most retailers have implemented cleaning and disinfecting routines to increase shopper and employee safety. We can provide industry specific hourly checklists, posters, guides, online training and other free resources to assist retailers.

As the U.S. races to distribute vaccines, a new alternative to regular disinfecting of high-touch surfaces is available. Retailers can use a longlasting antimicrobial surface protection solution, applied monthly, to protect surfaces and reduce disinfecting labor.

COVID-19 fatigue is real. It often manifests in grief, shock, anger and depression. The leadership challenge is to accept the situation and actively find a path forward.

Consumer behavior is shifting toward fewer trips, bigger baskets, increased “feel good” purchases and demand for cleanliness and safety.

Adapting to these changes provides an opportunity to differentiate from the competition and might just be your “get out of jail free” card against COVID-19 fatigue.

Due to the increase in basket size and the gradual return in trips, in-store sales have remained positive through most of the pandemic.

Mike G. Zahajko is the executive vice president, sales, for CAF. CAF is a leader in outdoor cleaning and c-store image solutions. CAF helps convenience retailers eliminate their toughest cleaning challenges. For more about CAF, visit www.mycaf.com.

FMN Magazine WINTER 2021 | 15

COMMERCIAL FUELS

How a Universal Fuel Card Can Lower Fleet Expenses Understand the cost of having drivers travel out of their way to use specific brands.

BY STEPHEN LASKY

U

nlike other fueling options, universal fuel cards enable drivers to use almost any gas station in the U.S. to fill up their vehicle.

While some fleet managers assume there is an added cost for this convenience, compared to discount networks, there can also be potential savings with this type of card product once all fleet costs are considered.

Fuel prices can vary greatly by gas station and brand. Knowing which stations offer the best prices, and being able to direct drivers to use those fuel locations, can lower company costs. Unlike major oil company cards, universal fuel cards offer brand flexibility. That means price flexibility. Drivers aren’t limited to a specific brand and its merchant stations.

If there is a better price across the street, they can use that site. By shopping across brands, companies can realize consistent savings, and some card products, like the Voyager card, have mobile apps to help drivers locate the bestpriced gas station while on the road.

While shopping across brands can lower fuel costs, experienced fleet 16 | FMN Magazine WINTER 2021

managers know the importance of balancing the price per gallon against the opportunity costs associated with operating a commercial vehicle. To understand this balance, you need to know how much it costs your fleet when drivers travel out of their way to locate certain locations or brands. An advantage of universal fuel cards is the ability to save driver time. Cardholders typically can refuel anywhere without having to spend time locating specific retailers. Initially, it might seem that driving a few minutes out of the way is not a big deal. However, driving just an additional 10 minutes to find a specific site, every day, for the entire year, ends up being over 40 hours annually! That’s an entire workweek wasted.

Let’s get more specific about the opportunity costs involved. Of course, there will be differences between industries and companies that make calculating the total cost difficult, but there are known costs of operating a vehicle that we can use to make a general estimate. The American Transportation Research Institute (ATRI), for example,

publishes an annual analysis of the operational costs of trucking, including the average cost per hour of operating a commercial vehicle. ATRI considers costs for maintenance, insurance, tolls and tires, in addition to wages and benefits paid to the driver. Recently, the institute estimated the average cost per hour was $63.70. The adjacent table shows a breakdown of that cost compared to previous years.

HOW DOES DRIVER TIME IMPACT FUEL COSTS? We can use the ATRI per hour cost information to examine a couple of scenarios.

Scenario 1 For a company with drivers who travel out of their way to locate a specific fuel brand or station, what is the cost of adding just five minutes of driver time?

Using the information from ATRI, we can calculate this: • Fuel Costs: $1.42 • Truck/Trailer Lease or Purchase Payments: $0.87 • Repair and Maintenance: $0.56 • Truck Insurance Premiums: $0.28 • Permits and Licenses: $0.08 • Tires: $0.13 • Tolls: $0.10 • Driver Wages: $1.96 • Driver Benefits: $0.59 • Total Added Cost = $5.98 Driving an additional five minutes adds about $6 per fill up. If your average transaction is 100 gallons, you would need a rebate of more FuelsMarketNews.com

COMMERCIAL FUELS

Motor Carrier Costs, Vehicle- and Driver-Based (2010–18) 2010

2011

2012

2013

2014

2015

2016

2017

2018

Vehicle-based $19.41

$23.58

$25.63

$25.78

$23.29

$16.13

$13.45

$14.50

$17.07

Truck/Trailer Lease or Purchase payments

$7.37

$7.55

$6.94

$6.52

$8.59

$9.20

$10.20

$10.39

$10.45

REPAIR & MAINTENANCE

$4.97

$6.07

$5.52

$5.92

$6.31

$6.23

$6.65

$6.58

$6.72

TRUCK INSURANCE PREMIUMS

$2.35

$2.67

$2.51

$2.57

$2.89

$2.98

$3.00

$2.95

$3.32

PERMITS AND LICENSES

$1.60

$1.53

$0.88

$1.04

$0.76

$0.78

$0.88

$0.92

$0.95

TIRES

$1.42

$1.67

$1.76

$1.65

$1.76

$1.72

$1.41

$1.50

$1.50

TOLLS

$0.49

$0.69

$0.74

$0.77

$0.90

$0.79

$0.97

$1.05

$1.17

FUEL COSTS

Driver-based DRIVER WAGES

$17.83

$18.39

$16.67

$17.60

$18.46

$19.95

$20.91

$21.97

$23.50

DRIVER BENEFITS

$6.47

$6.05

$4.64

$5.16

$5.15

$5.22

$6.18

$6.78

$7.10

TOTAL

$61.9

$68.21

$65.29

$67

$68.09

$62.98

$63.66

$66.65

$71.78

SOURCE: AMERICAN TRANSPORTATION RESEARCH INSTITUTE (ATRI)

PHOTO©ISTOCK/VITPHO

than $.06 per gallon to offset this increased cost.

Scenario 2 The ATRI analysis is most applicable to tractor-trailers traveling on highways.

Operational costs will differ for companies that rely on box trucks in metro areas. However, we can make some adjustments to better represent the scenario of operating a box truck: • Fuel Costs: $10.25 • Truck/Trailer Lease or Purchase Payments: $5.75 • Repair and Maintenance: $5.10 • Truck Insurance Premiums: $2.55 • Permits and Licenses: $0.60 • Tires: $0.65 • Tolls: $0.25 • Driver Wages: $21.10 • Driver Benefits: $6.75 • Revised Total Cost per Hour: $57 With the revised estimates, let’s calculate the cost of adding five minutes of driver time when a box truck is being operated: • Fuel Costs: $0.85 • Truck/Trailer Lease or Purchase Payments: $0.48 FuelsMarketNews.com

While shopping across brands can lower fuel costs, experienced fleet managers know the importance of balancing the price per gallon against the opportunity costs associated with operating a commercial vehicle.

• Repair and Maintenance: $0.43 • Truck Insurance Premiums: $0.21 • Permits and Licenses: $0.05 • Tires: $0.05 • Tolls: $0.02 • Driver Wages: $1.76 • Driver Benefits: $0.56 • Total Added Cost = $4.42 At first glance, it seems that greater fuel efficiency (MPG) and lower operational costs for a box truck result in a lower added cost of driving out of the way to purchase fuel. However, that isn’t the case once we factor in that a box truck has a smaller fuel tank. If your average transaction is only 40 gallons, for example, you would need a rebate of $.11 per gallon to offset this increased cost of driving five minutes out of the way.

Be sure to factor in all the potential costs when choosing a fuel card for your company. If you’re considering discount networks, make sure fuel locations are along driver routes. If not, opt for a universal fuel card. The convenience of fueling at the nearest location can reduce driver time and operational costs, which add up.

Stephen Lasky is P-Fleet’s vice president of support. P-Fleet is a San Diego-based fuel card and payment management solutions provider for commercial fleets, including those with owner-operators. Learn more at www.pfleet.com.

FMN Magazine WINTER 2021 | 17

FUEL MARKETERS

Ode to the Bulk Plant These facilities are the backbone of the petroleum marketing industry.

BY BRIAN REYNOLDS

B

ulk Plants. If you say it out loud to the uninformed, you are liable to get a big yawn. But bulk plants are probably one of the more interesting pieces of architectures and business models in our industry.

For starters, there is no such thing as a typical bulk plant.

Most bulk plant facilities are manifestations of decades-old growth that have increased in size and purpose 18 | FMN Magazine WINTER 2021

over years and years. What might have originated as a top-load staging area for small bobtail tank trucks are now monstrosities that have 500,000-gallon tank capacity and are connected to pipeline and/or railroad spurs. Products can include propane, biodiesel and bulk lubricants. They can have yard space for 18-wheeled tractor-trailers. There can be a card lock and warehouse space.

Retail c-store facilities are all about order in the universe and a structured competitive environment with car counts, hard corners and demographic research. Wholesale bulk plants are all about Armageddon and preparing to do battle and service a robust customer base!

Tanks rise from the ground up, stacked and standing at attention, surrounded by concrete beams and a staircase leading to a loading dock resembling a dais worthy of General George Patton. Trucks wait in line to be loaded and ready for takeoff to embark on their daily sorties. Warehouses are filled with barrels of lubricants and heating oil trucks ready to roll for their degree-day calculated deliveries. Bulk FuelsMarketNews.com

PHOTO©ISTOCK/WEERAPONG KHODSOM

FUEL MARKETERS

plants have that powerful, industrial look that demands respect.

A bulk plant typically consists of several tanks, either above ground (vertical or horizontal) or buried.

Some bulk plants are located alongside railroads. They sometimes receive product from railroad tank cars, spurred directly to the bulk plant yard. More often, however, bulk plants are located at the edge of small towns or in the industrial areas of cities. Liquid fuels, such as gasoline, are delivered to plants by large tanker trucks and pumped or dropped into the storage tanks that are frequently manifolded together. Later, these products are loaded into smaller tank trucks for delivery to service stations and commercial fueling facilities.

Biodiesel production is common at bulk plants. Even though diesel rack prices have decreased in recent years, biodiesel is still something that operators continue to specialize in, and the demand remains strong.

Propane also can be found at many bulk plants. Propane’s popularity has increased over the years, and I have noticed that when I take my tanks to be refilled for my outdoor cooking appliances, the tank and my wallet seem heavier than when I go to get an empty one exchanged for a full one!

Propane bulk plant operators have a slightly more complicated operational process that includes expertise in using pressure relief valve stacks, liquid and vapor compressors and pumps, loading and unloading stations (including truck bulkheads and railroad tank car FuelsMarketNews.com

unloading risers), emergency procedures and a working knowledge of shut-off valves.

Frequently, the bulk plant is where you will see the dispatch office as well.

Today, dispatchers are more supply chain managers than their predecessors from a bygone era. Dispatchers are well informed and highly trained computer operators who are motivated to maximize delivery trips and provide just-in-time inventory for many types of fueling facilities. Often, a marketer’s general office is in the same location and where environmental compliance is maintained. Bulk plants are also often the home base for many common carrier operations.

Another common sight at the plant is a cardlock facility. Cardlocks continue to be popular with jobbers and fleet operators Many systems have safeguards built into them to minimize misuse and ensure proper controls are in place for product dispensing, such as PetroVend’s Automatic Vehicle Identification RFID system. Such systems are designed to minimize human interaction at the pump to include the automatic capture of miles and engine hours, along with an EMV-certified terminal for card locks that take credit cards.

Modern petroleum bulk plants are sophisticated engineering marvels that often look like futuristic settings from science fiction movies. Bulk plants often go unthought of yet are the backbone of our petroleum marketing industry as command and profit centers.

Retail c-store facilities are all about order in the universe and a structured competitive environment with car counts, hard corners and demographic research. Wholesale bulk plants are all about Armageddon and preparing to do battle and service a robust customer base!

Brian Reynolds began his career working as a teenager in his familyowned jobbership in Cisco, Texas, and was at the forefront of many significant industry milestones.

Reynolds was an early adopter of cardlock systems in the 1980s, a pioneer of high-volume supermarket fueling centers in the 1990s and one of the key architects of inventing reward-based fueling loyalty in the 2000s. He currently works for Dover Fueling Solutions in ClearView, wet stock management sales. Contact him at Brian.Reynolds@DoverFS.com or (325) 733-6490.

FMN Magazine WINTER 2021 | 19

FUEL MARKETERS

Key Metrics to Improve Fuel Sales Here are five of the most common and important KPIs for fuel and oil marketers to track.

BY JOHN J. KIMMEL

B

y the time actual sales figures are tallied, it’s too late to do anything about them. For most organizations, monitoring salespeople means looking at the sales number for the period that just ended, whether that was the year, quarter or month, and then telling them they need to do better. At the same time, the sales manager’s boss is asking 20 | FMN Magazine WINTER 2021

the sales manager what happened and if the numbers will increase. Of course, the sales manager assures the boss that the numbers will get better but is secretly hoping not to hear the dreaded question: How do you know if sales will increase?

That is the million-dollar question, and the answer is KPIs, or key performance indicators. KPIs are activities

that need to happen before the sale is made, and tracking these activities can give managers powerful insight into whether their salespeople are on track to hit their numbers—or not.

Here is a list of some of the most common and important KPIs for fuel and oil marketers to track. This list is by no means exhaustive, and some will vary based on the sales team’s structure. It also assumes teams have both inside and outside salespeople.

1. Outbound Attempts to Contact.

How many calls are your salespeople making per day? This can include faceto-face visits, Zoom calls, phone calls, emails, texts and even social media messages. One thing you can be sure of is that your salespeople can make more calls than they are making now. How can I say that? Because in my entire FuelsMarketNews.com

FUEL MARKETERS

PHOTO©ISTOCK/GOVINDANMARUDHAI

career, I have never trained anyone who could not be a better steward of their time and increase their number of calls. Not once. There is simple math at play here. My friend Skip Miller gave us the formula: R=FxC. That is, revenue equals frequency times competency.

Competency means getting better at how we preform our sales activity.

Frequency is how many times we do it.

If we make more calls (increasing our frequency), then our revenue produced will increase as well.

I highly suggest that these calls get recorded in a CRM. They need to be recorded somehow, and recording them by hand is ineffective and takes just as long as recording them in customer relationship management software, which can help you achieve so much more.

2. Actual Conversations. You would think this goes without saying, but very few organizations or salespeople track how many of their attempts to contact result in a conversation. This data goes hand in hand with outbound attempts to contact.

Imagine salesperson one makes 60 calls and has three conversations, while salesperson two makes 10 calls and has three conversations. Who is performing at a higher level? The answer could be neither. Salesperson one may have a competency issue because his conversation success rate is so low. Salesperson two may have a frequency issue since she only made 10 calls. The more salespeople you have, the more accurate and relevant this information will be. For those with small or one-person sales teams, having someone who can FuelsMarketNews.com

tell you industry standards for sales activities will fill this gap.

3. Sales Stage Movements. Every customer who encounters your organization goes on a journey. If that journey is poor, they most likely will buy from a competitor. If that journey is good, they will likely buy from you. If that journey is great, they will become a fan of your organization and will not only buy from you, but they will keep buying from you and even refer others to you. That customer journey is defined in the sales process your company uses and is broken into stages like rapport and discovery. If this is all Greek to you, then you have a huge opportunity here to not just track sales stage movement, but to improve your sales efforts immensely by adding a true sales process to your sales program.

One thing you can be sure of is that your salespeople can make more calls than they are making now.

4. Lead-to-Close Rate. For an inside salesperson, this likely involves an inbound lead. In other words, a potential new customer contacted your company. That may be through a form filled out on your website or a phone call to your office. Either way, you have a new sales opportunity. For an outside salesperson, this could be a cold call on a new business or a referral. However it occurs, you have a new lead to sell.

“Close” is the last stage of the core sales process (customer journey) we discussed previously. Its name is self-explanatory; it occurs when the transaction is complete. For some that may mean giving you payment, for others it may mean signing a contract for delivery. Either way, the deal is done.

FMN Magazine WINTER 2021 | 21

FUEL MARKETERS

Imagine salesperson one makes 60 calls and has three conversations, while salesperson two makes 10 calls and has three conversations. Who is performing at a higher level? The answer could be neither.

John J. Kimmel is the author of “Selling with Power” and has spoken for many state and regional petroleum marketer associations. Kimmel provides custom solutions to increase the effectiveness and profitability of sales teams for petroleum marketers all over the United States. To learn more, visit www.johnjkimmel.com.

22 | FMN Magazine WINTER 2021

What are each of your salespeople’s conversion rates from lead to close?

Do they close 90% of their leads? Do they close 10% of their leads? If you are like most companies, you don’t yet have that information. Improving this metric can have a huge impact on your bottom line.

5. Number of Active Customers and Average Sales per Active Customer. OK, so this is really two separate metrics, but they are tied together. If you can see the number of customers who buy something from you each month it will give you tremendous insight into who your salespeople are talking to each month. People buy from people they like and trust, and that is true for your customers as well. If one of your salespeople has 20 active customers per month and another has 50, then I can almost guarantee that the second salesperson is making more sales calls to unique people than the first. They may both make the same number of total visits, but the second is seeing a higher number of customers, fewer times per customer, than the first.

The second part of this category is average sales per active customer.

This has to do with wallet-share.

Almost every petroleum marketer I know has more than one product to sell. Some have many. When a salesperson captures the business on more than one product, their sales per account will increase. Of course, they can also capture more of the total volume of a single product and

increase this number as well. A great salesperson fights for both. Watching these numbers can be a great indicator as to what specific training would most improve your sales team and their productivity.

As with all monitoring that relates to achieving goals, the simpler the system the more effective. I could list another 20 things you could track, but if you try to measure too many things, you are likely to lose sight of everything. My suggestion is that you pick three things to focus on first. Once those three things are improving you can increase what you track to as high as five things. If you feel like you have a handle on an item, then stop tracking it (or automate tracking, like with a CRM) and add a new metric.

The more you refine this process, the higher the sales production will be from your team.

FuelsMarketNews.com

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24 | FMN Magazine WINTER 2021

FuelsMarketNews.com

Read the unabridged version of our interviews with industry thought leaders at www.fuelsmarketnews.com, and look for them in upcoming editions of the FMN newsletters.

LOOKING BACK –AND AHEAD Industry leaders share how COVID-19 affected their businesses and their outlook for 2021.

BY KEITH REID

A

s we move into 2021, it’s a good time to reflect on what has happened for the industry over the past year and get some perspective on what lies ahead. We leveraged the marketer/ retailer members of our new FMN Editorial Council (see page 4 for more details) to get their perspectives on the year of COVID-19 and what they are planning for 2021. They also share some best practices from their operations and answer questions about leadership.

BRAD DAVIS Brad Davis is the managing partner/owner of Mobile Force Refueling (MFR), which provides turnkey mobile equipment and vehicle fuel and lube solutions for commercial customers. It operates 31 trucks, provides on- and off-road

FuelsMarketNews.com

diesel fuel, a full line of top-grade petroleum products and an experienced staff to facilitate these operations.

How was 2020 for your operation?

Davis: We’ve had a tremendous amount of growth. This has been our best year ever, as far as gallons and revenue and profits. And we look for it to continue that way for the foreseeable future. We have experienced virtually no effects from the current virus. We were busy in all the spaces that we work in. And we operate in Arizona and cover Nevada and New Mexico, with some work in Colorado as well.

They didn’t have such an aggressive initial response to the pandemic.

What is your key to success?

Davis: We’re technically not a fuel company.

We carry and provide fuel, but we are a service company, and people are willing to pay a FMN Magazine WINTER 2021 | 25

LOOKING BACK –AND AHEAD premium for that service. With mobile fueling, service and reliability are crucial. We gain a lot of business this way. Sometimes the competitor’s driver shows up on schedule, sometimes not. We will fix that problem for you.

How was construction fueling?

Davis: Construction here is booming. There are a ton of buildings going in, and we’ve had a ton of work from that standpoint. I can only speak specifically to Arizona, of course. The market here is still very robust, still very strong, and everyone is leaving California and going to Texas, Arizona and Nevada.

What about special event fueling; was that impacted?

Davis: We have been fortunate, so far. The carnival season here in Arizona is not that long.

All these folks chase the weather. So, you’re not setting up a carnival in Arizona in May through October. Our carnival season starts the second week of January and runs through the last week of March. So, the season had ended when the coronavirus impact really started. In any case, that is a relatively insignificant piece of our business.

How did your operation react to COVID-19?

Davis: We’ve not made many changes. We have a temperature test for the drivers to make sure they are OK. Many of our customers are requiring masks, and we are certainly going to respect their wishes and do the right thing.

A few of the people left the office for five or six weeks, but we are all back in-house—fully staffed.

When COVID hit, I sent a message to everybody saying we’re not going anywhere. Business as usual, and nobody’s getting laid off. I gave them $1,500 bonuses in March, May and July.

What do you expect for 2021?

Davis: We are certainly expecting an increase. We are seeking to expand our model as our influence grows. We are going to Denver and Albuquerque because we’re getting requests from big companies that say we heard about you guys in Phoenix and Las Vegas and Tucson—could you help us in Denver? Can you help us in Albuquerque?

26 | FMN Magazine WINTER 2021

How important is technology to your operation?

Davis: It’s the backbone of what we do. We provide our clients with every level of data.

Everything that we fuel has a barcode. We scan those into electronic pricing and distribute that to the client, whether it be email, fax, electronic file conversion, etc. We don’t have any paperwork in our operation at all. We have an entire inventory of tanks and tank monitors that send us signals from the field to go out and refill them.

BRAD DOUGLASS Brad Douglass is the CEO of Douglass Distributing, which distributes more than 130,000,000 gallons of fuel annually. Its Carrier Group includes 15 trucks that run 24 hours a day/seven days a week/365 days per year. Its retail division owns and operates 22 co-branded sites and employs more than 300 team members. There is also a commercial division and a common carrier business.

What was the impact in 2020 on your commercial operations?

Douglass: Our commercial transport (fueling) was impacted with the school districts closed this spring, but the commercial tank wagon has continued and in fact has grown.

We serve a lot of the marinas in North Texas and Southern Oklahoma, and everyone canceled their Disneyland trips and decided that they were going to vacation closer to home—four-day weekends at the lake. And it has been the best summer we’ve had probably in 15 years serving the recreational areas. To serve this market we are selling ethanol-free gasoline.

But the biggest boost was new construction.

We are in Texas, so that might not be applicable across the country. Whether it’s residential or commercial, all of our customers are working on significant backlogs. It’s been absolutely exciting.

What about your retail operations?

Douglass: Fortunately, our shutdowns in Texas have not been as aggressive as elsewhere, and it hasn’t killed off business like you see in other FuelsMarketNews.com

YOU DON’T NEED

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GO YOUR OWN ROAD.

LOOKING BACK –AND AHEAD states. Our urban stores were impacted, both in terms of the fuel volume and inside sales. Out in the country where I’m at—our little towns with 40,000 residents and our county with 120,000—we saw less impact because the folks out here still had to go to work. They were not able to work from home, like they could in the urban areas. So, we saw a really marked difference, though the volumes are mostly restored.

Our restaurant sales were really hammered. At one point, we were down 50% in our restaurants, but they’ve come back to some extent.

A bright spot for us has been the stimulus that put money in our customers’ pockets. That, along with the federal unemployment bonus and state unemployment, meant our customers had money, and our c-store sales jumped with that.

What do you expect for 2021?

Douglass: Our bank is telling us that the economy is not going to recover until first quarter of 2022. Our family looked at each other and said, we can’t wait that long, so we’re going to grow our way out of

this thing. We’re not going to wait for a wave to wash prosperity over us. We’re going to go create it. We did this before in 2007 and 2008. We are adding salespeople; we are adding service people.

We had a local company sell out to a 7-Eleven, and whatever 7-Eleven didn’t want we picked up.

You operate a lot of divisions. How do you best manage that?

Douglass: We have a team of 15 running the dealer division. Then a team of 12 doing lubricants, for example. They really run as independent companies. It creates a little chaos, but it’s very entrepreneurial, and it ends up being very efficient. It’s certainly not top down.

SCOTT MINTON Scott Minton is the business development director for Stillwater, Oklahoma-based OnCue, a growing innovator in the Oklahoma convenience store market. Since 1966, OnCue has expanded to more than 75 locations today and employs more than 1,200 people. The operation strives to provide the ultimate customer experience and values honesty and respect for others.

FMN: What did 2020 mean for your operation?

Minton: We had plans to open four units at the beginning of 2020, including our first unit in Houston, Texas. This is part of our growth strategy. As we got into March and April, and COVID started to develop, we very quickly had to reevaluate the plans and outcomes for 2020. So, early on we put a freeze on all spending and shut down all our construction projects, except for Houston.

We just did not know what to expect.

While our overall business volumes dropped from people not going to work, it became apparent that we were not going to be in trouble financially. As we started getting more comfortable, we restarted the other three stores, and we will have all four stores open this year as was our goal. So, we are excited about that. And we are excited about the continued growth in Oklahoma City, as well as our new market in Texas.

28 | FMN Magazine WINTER 2021

FuelsMarketNews.com

FMN: I understand the Houston location is a bit of a special project.

Minton: We have a very strong relationship with Phillips 66, and Phillips wanted a new distribution partner in Houston. They asked us to come and try our brand, and see if our brand does as well there as it does in Oklahoma City. Our first store will be within eyesight of the Phillips 66 headquarters, so it will have a lot of eyeballs on it. If we do as well in Houston as we have in Oklahoma City, we will have a lot of stores there in the future.

FMN: As we begin to move past COVID-19, what do you anticipate as being longer-term ramifications?

Minton: I don’t think anything is going to quickly change. We may have fewer restrictions

Half Horz.indd 1 FuelsMarketNews.com

on how many people are allowed in a room at a certain time, or things like that. But, a lot of the simple stuff—washing hands, cleaning counter surfaces, standing a little bit apart from each other, being a little bit more cognizant of hygiene—will stick around.

How is OnQue with EMV compliance?

Minton: It is a priority for Phillips 66. They wanted all sites to be EMV compliant by the original deadline, but that did get pushed back. We internally said we will be compliant by the time that Phillips was requiring. The fleet fuel cards are not yet EMV compliant. I think that eventually everyone will be EMV compliant, and there are benefits to it, not only for the retailer but for Phillips as a brand as well as the customer.

6/25/2020 11:21:31 AM FMN Magazine WINTER 2021 | 29

LOOKING BACK –AND AHEAD Your operation has a strong commercial business, including CNG. How is the CNG market today?

Minton: It was a great business for us. The number of CNG vehicles on the road has decreased over the last four or five years. There are still a lot of large semis that are CNG, but it becomes one of those cases where you very quickly put your own fueling infrastructure in as you get past a certain number of vehicles, because you’re going to save money. We continue to have 16 operating CNG sites, but our volumes, obviously, are not as good as they were five years ago when diesel was over $4.

What about EV charging?

Minton: We’re exploring that and just trying to get our feet wet for what we expect to be a much larger market in the coming decades. I think it’s going to take some time for people to convert, especially in Oklahoma, because of the low price of gasoline. But the market’s coming for

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sure, and we want to understand it before we’re too late.

JARED SCHEELER Jared Scheeler left a senior management position at a successful convenience store chain in Minnesota to found The Hub convenience store chain. The Hub has established itself as an upscale convenience chain, with six locations operating in western North Dakota’s Bakken oil region. Scheeler is currently on the NACS Board of Directors, serving as treasurer, and is profiled for his government relations leadership on page 40.

What was the impact of COVID-19 on your operations?

Scheeler: At first there was so much uncertainty.

We assumed that revenues were going to drop.

The one thing that we wanted on the team member side was to make sure that we were not laying off anybody. That was never an option for us. We gave all our teams the option to take off if they had fears about COVID and said we would keep their jobs until they were ready to come back.

And then we made all the physical changes to our businesses—(plexiglass partitions), sanitizing stations, converting our faucets and our toilets, getting rid of roller grills, getting rid of our bakery for a period.

Even though all our locations are seeing fewer daily transactions, the average transaction is bigger than it has been in the past. And that is magnified at our more-rural stores. Examining the numbers and business flow, we realized one day that people are scared to go to the bigger shops, and they’re frequenting us more for their grocery occasion or their dinner occasion. Once we got out of that initial dip in business, we knew that we were not actually going to be off from a year ago.

We’re still in growth mode. I think we’ve established a good base of business and a good reputation in the area. It’s taken a lot of hard work and effort to get to that point, and I have no reservations about the future.

FuelsMarketNews.com

Are there any things that you see carrying over after COVID-19?

Scheeler: Little things like sanitizing stations— they’re going to stick around. There are so many things in our stores, whether it’s restrooms, cash and coins, cooler and other door handles that are highly touched areas. Looking back on it, I probably should have always washed my hands more!

Restrooms are going to have to try to convert to hands-free and remove the doors where possible.

I do worry about self-serve foods. We’re actually converting our flagship store into a full-service bakery from self-serve—and we did a tremendous self-serve business. And I think the roller grill might go away, and that’s a problem for many people in our industry.

As a smaller operation, do you think technology helps you level the playing field with some of these large chains?

Scheeler: I’m not so certain it helps us level the playing field. I think it keeps us relevant because all these bigger companies are already there. For a small business, such as myself, it is a lot harder. I think it’s necessary for us to continue to compete with them, now and in the future.

Keith Reid is editor-in-chief of Fuels Market News. He can be reached at kreid@fmnweb.com.

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7/2/2020 2021 3:43:07 PM FMN Magazine WINTER | 31

GENERATING

32 | FMN Magazine WINTER 2021

FuelsMarketNews.com

OPPORTUNITY The generator fueling market offers high margins and stability and requires a high level of customer service.

BY KEITH REID

arketers are always looking for opportunities to leverage their core competencies distributing fuel. Mobile fueling, or wet hosing, is one area to explore.

While it falls under the general fueling umbrella, there are a number of differences between delivering bulk fuel to retail sites and delivering fuel to fleets or construction sites, which can involve fueling the actual vehicles (though in many cases the marketer can supply a temporary tank on site to serve as a fueling point).

Keeping generators fueled is a subset of mobile fueling and includes emergency generators in facilities, off-the-grid building sites, special events and cell towers—to name a few. The fuel volumes delivered are lower, the trips tend to be more frequent and the customer service requirements are high. This is offset by customer stability and higher margins for those that can make the model work.

FuelsMarketNews.com

From a fuel standpoint, diesel is dominant, though propane is making inroads.

Gasoline can be required in disaster events to help keep smaller consumer generators fueled. DEF is increasingly important, and fuel polishing services and/or additization can be a core component of the service as well.

Could this be a potential area of growth for your operation?

Service is always important with fuel distribution. Experiencing a stockout at a retail site due to a failure on the distributor side is no laughing matter. However, having hospital operating rooms go dark in the middle of surgeries is another level entirely.

Service is king with generator fueling, and the customer has no problem paying for it. “This business is very customer-service oriented,� said Brad Davis managing partner at Mobile Force Refueling (MFR), which provides mobile fueling services for a range of user needs, mainly in the Phoenix

FMN Magazine WINTER 2021 | 33

area. “The reason why a lot of marketers are not successful in our space is because they just don’t know logistically how to run this type of operation. All we know is logistics,” Davis said. “I hate full loads. I hate transport work. I hate lubricants.

I hate all the things that people love. Our model is built on really one thing—service. We’re never going to be the cheapest game in town, but our clients are willing to pay for our service.”

Davis noted that one key to reliable service is operating a dedicated fleet of trucks—MFR’s fleet includes 31 vehicles. Mobile fueling trucks tend to be straight trucks with 4,500-gallon tank capacities (or similar). Every MFR truck is capable of self-loading, so the company can leverage bulk storage even if a local disruption puts the terminals offline or otherwise kills power.

While remote tank monitoring is common throughout the industry, generator fueling is not typically linked to “just in time” inventory.

“When they ask you to be there every six or 12 hours, even though it doesn’t make sense—they don’t care and they’ll pay extra,” said Mark Fitz, president 34 | FMN Magazine WINTER 2021

of Star Oilco, which provides mobile fueling, cardlock and bulk diesel (including renewable), primarily in the Portland, Oregon, area. “So, we are going to do this, and we’re going to charge for the stop.”

That client request is not without merit. The margin for error is highly compressed with generator platforms.

“There are two components that go into response time,” Davis said. “First is the size of your tank, as opposed to the size of the generator. How many run hours do you have in the tank? And the second component is how often do you fill your tank up? So, let’s say you’ve got a thousand-gallon tank and that will run you for eight hours. Well, if you don’t refill your tanks till they get below 50%, you’re only going to have four hours of run time.”

So, what are some of the generator fueling applications open to marketers?

CELL TOWERS Cellular service has been a mainstream infrastructure for decades throughout the U.S., even FuelsMarketNews.com

in the most remote of areas. It’s worth noting how that is possible.

Generators are often used to power cell towers not wired to the grid. They also provide backup power, supplemental power and, in some cases, primary power.

“You’ll get these cell towers that are generator only,” said Fitz. “You’re servicing a generator on top of a hill in the middle of nowhere. And they’re thankful that you’re showing up. It’s good money.”

CONSTRUCTION Construction is a core mobile fueling market. This takes the form of filling construction vehicles or a marketer-supplied portable tank fueling point.

These sites also can include generators.

“Typically, contractors won’t get out of bed for less than a thousand dollars,” said Fitz.

“And if they expect you to do something for 50 bucks, you’ve got the wrong contractor. A construction site is the only site that I’ve ever been to where people want to make sure we’re actually getting good pay and have well-compensated drivers.”

SPECIAL EVENTS Commercial fueling has been COVID-19 resistant in many regions, but special event fueling has obviously been impacted. Concerts, state fairs, festivals and other large events often rely on generators for their power (or supplemental power) instead of the local grid. The service and pricing requirements are in line with other markets, but there can be a few additional perks for the fuel supplier.

“I love doing events—air shows and concerts and festivals—because you typically get free FuelsMarketNews.com

tickets,” said Fitz. “So, you’re able to reward your employees with free tickets to go to the Pickathon; that’s a pretty big deal.”

He emphasized the need to be careful when fueling some of these sites; for example, avoiding tents filled with sleeping staff or customers during those early morning top-offs.

“ THE REASON WHY A LOT OF MARKETERS ARE NOT SUCCESSFUL IN OUR SPACE IS BECAUSE THEY JUST DON’T KNOW LOGISTICALLY HOW TO RUN THIS TYPE OF OPERATION.” EMERGENCY FUELING Generator fueling achieves a higher profile during a disaster. That recently played out with the forest fires in the Pacific Northwest.

“Out here in Oregon, we were doing the most remote, crazy generators because you have these cell towers on top of these really remote sites,” Fitz said. “Basically, they cut off power because they’re fighting fires, and power lines contribute to more fires. But the firefighters need cell towers for their emergency response. So, every day we’re driving up to two hours to a site. Our other business had really stopped because of the fires, but these cell towers came on and we were able to keep moving.”

FMN Magazine WINTER 2021 | 35

The flooding and other devastation from hurricanes is another area where generator service shines. One company, Broco Oil, a heating oil, commercial fueling and bulk fuels operation serving the Northeast, has been heavily involved in emergency fueling in its relatively short history. This included a strong response to Hurricane Laura in August 2020. There are numerous logistical challenges in a disaster,

“ YOU’RE SERVICING A GENERATOR ON TOP OF A HILL IN THE MIDDLE OF NOWHERE. AND THEY’RE THANKFUL THAT YOU’RE SHOWING UP. IT’S GOOD MONEY.”

along with the challenges of fatigue, disruption and wreckage.

“Every drop of fuel is essential, whether it’s five gallons or a thousand gallons,” said Bob Brown, Broco’s president. “So, we take them all on. We did 400 generators for just about 28 days straight, every day. Some generators get filled two or three times a day. So, there is a lot of coordination behind the scenes that we have 36 | FMN Magazine WINTER 2021

to implement a fuel logistics coordinator to manage those spreadsheets and the trucks that are dispatched.”

DEF now poses an additional logistical challenge as the latest clean diesel technologies enter the generator space. It became so extreme during Hurricane Laura that Broco Oil went to Houston to pick up DEF totes and bring them back to Lake Charles. “It was a 14-hour day for me just to get those loaded on the trailer and bring them back. But that’s how quickly we recognized the problem, and we acted before a single generator went down.”

Another serious issue is operating in a devastated environment. Brown noted that the greatest initial challenge was finding a staging area before the storm arrived that minimized the risk to drivers and trucks and allowed for an immediate response. “When that storm passes, we’re able to start out and fuel these generators because some of these only have about a five- or six-hour run time before they run out,” he said.

“So, if it’s a hospital we’re talking about and some patients are non-ambulatory and unable to evacuate, we’re helping out right away.”

BACKUP POWER Backup power is important for a range of facilities—hospitals, manufacturing, federal and state offices, major business offices, schools, airports and the like. They typically run regular tests, require clean fuel in the tanks and ready replenishment so that the generator keeps running as that initial load of fuel is drawn down. The core requirements of reliable service are the same for all facilities, but the challenge increases dramatically in facilities like data centers.

Fitz noted that some of the challenges with backup generator fueling require a disciplined driver. “Occasionally you’ll get a person managing the facility who wants to circumvent safety systems,” he said. “You are filling a tank with an auto FuelsMarketNews.com

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shutoff and typically an audible alarm or a visual alarm like lights. The manager may bypass that and tell you to pump more fuel.

Do not do that. We had a driver do that once and it blew diesel out the vent and all over a parking garage filled with some expensive cars. And there was nothing you could say that would convince the guy who caused that, that it was his fault.”

The Southwest promises a fair degree of environmental stability compared with other regions and is

“ EVERY DROP OF FUEL IS ESSENTIAL, WHETHER IT’S FIVE GALLONS OR A THOUSAND GALLONS. SO, WE TAKE THEM ALL ON. WE DID 400 GENERATORS FOR JUST ABOUT 28 DAYS STRAIGHT, EVERY DAY.”

a core location for major tech data centers. But even there, there is no guarantee the electrical grid will be immune from disruption. Mobile Force Refueling has locked up much of the data generator market in its business area including some widely known, 38 | FMN Magazine WINTER 2021

international tech companies (NDAs prevent sharing names). The scale of the fueling challenge is significant, involving dozens of high-capacity generators. A Microsoft facility, for example, reported 72 generators for one of its operations.

“These centers can consume 20,000 gallons an hour when they’re fired up, and some of them closer to 45,000 gallons an hour,” Davis said. “The plan is to always keep them full. What most operations aren’t able to do, which we are, is handle the logistics. They can get the fuel there, but they don’t know how to pump it. They show up with the truck and it doesn’t have a pump on it. Our trucks just go through the lineup 700 gallons at a time to each generator, then come back to fill up and run the route again.”

When possible, MFR works with the data center operator from the start of construction. “When these things are going up we’re involved from day one; they’re going to have a hundred generators each with 6,500-gallon fuel tanks on them. And the electrical contractors who use us for their emergency needs will get us in contact with the general contractors and then the owners so we’re involved in many cases from step one.”

So, is generator fueling for you? Generator fueling has most of the same core competencies required to keep earth-moving equipment or a bakery fleet fueled for business at the start of the workday. But there are differences. The need can be far more critical and involve human life.

There is steady, low intensity work but periods of intense, disruptive activity. And, as with commercial fueling in general, you have to be able to provide exceptional service.

Keith Reid is editor-in-chief of Fuels Market News. He can be reached at kreid@fmnweb.com.

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IMPROVING YOUR PERFORMANCE

NACS TREASURER JARED SCHEELER SHARES WHY ADVOCATING FOR THE CONVENIENCE AND FUEL RETAILING INDUSTRY IS NONNEGOTIABLE FOR HIM.

BY KEITH REID

40 | FMN Magazine WINTER 2021

FuelsMarketNews.com

JARED SCHEELER

CEO, THE HUB CONVENIENCE STORES INC. NACS TREASURER, 2020-21

L

eadership takes many forms. For Jared Scheeler, one aspect of that leadership involved leaving a senior management position at a successful convenience store chain in Minnesota to return home and help found The Hub Convenience Stores, a chain in western North Dakota’s Bakken oil region. The Hub has established itself as the first North Dakotabased upscale convenience chain with a strong focus on foodservice and healthy food and snack options. It supplies Mobile-branded fuels.

Another aspect of Scheeler’s leadership is his long-running—15 years at this point—involvement with NACS. Scheeler is a NACS Board member who currently serves as treasurer. And then there is his involvement and support of legislative activities that support the convenience and fuel retailing industry.

FMN: How did you get involved with NACS?: Scheeler: I’ve been attending NACS shows since 2001. I became more involved around 2004 by

FuelsMarketNews.com

FMN Magazine WINTER 2021 | 41

talking to some senior leaders within the organization about the opportunity to share some of things that my company was doing that I felt were unique in the industry. And in 2009, I was fortunate enough to be asked to join the Member Services Committee. I joined the Board of Directors in 2010 and became treasurer this year. I’ve been heavily involved in government relations during this time, centered around NACS’ Day on the Hill event, which I’ve attended every year since 2009.

That’s really what got me going with government relations, being part of that process on Capitol Hill, walking through the halls of Congress, which even 12 years later I still get chills. It’s a sacred space, even though we get so frustrated with the government so often. I also have become more involved with state and local politics.

FMN: Did you initially find political activism intimidating?

Scheeler: I certainly didn’t make the decision to attend the first Day on the Hill on my own. That was strongly encouraged by John Eichberger, who was in NACS government relations at the time and is the executive director of the Fuels Institute today. NACS does an excellent job of pairing new people with established veterans—people who are comfortable navigating Capitol Hill and leading meetings and talking about the issues that are important to our industry. So, I had a lot of great people to look up to and learn from before I was set free on my own.

FMN: How important is it to be personally involved in the process?

Scheeler: You get the full value of your NACS membership based just on the lobbying efforts.

I think it is important for people to understand that, because you don’t necessarily experience that directly, but it does so much for our industry.

So, why is it important for me to personally get involved with government relations? You get out of it what you put into it. If you don’t put any personal time, effort, energy and finances into 42 | FMN Magazine WINTER 2021

something like government relations you can’t expect to get specifically what you want or what’s best for your business. When I look at my dayto-day functions as a business owner—finances, human resources, marketing—all of those are important operations. But government relations is nonnegotiable for me.

There are so many business owners who don’t think of themselves in that realm. And we need to. I’m a small guy. I bring a different perspective to the issues that our industry faces. I have an obligation to my business and to my team members to stand up for our industry generally, and for The Hub specifically.

FMN: What are some of the federal issues that impact your local business?

Scheeler: One thing that is relatively unique to North Dakota is the impact of the challenges facing the energy industry. We are in coal country, and that is an industry that has been vilified for the last 10 years. Losing that industry would be devastating to some of the communities where we do business. We’re also right in the heart of the Bakken Formation, and the fracking industry is under attack. And not only politically, but from the demand drop from the pandemic (and the short Russia/Saudi oil price war). That really scared the production industry.

And if that wasn’t enough, you have the issues with the Dakota Access Pipeline. The potential effect of that being shut down has scared the heck out of the producers in this area, and oil activity has gone down drastically even though the barrel price right now is pretty good.

FMN: What have been some of the major issues you have been involved with over the years?

Scheeler: The one that really jumps out to me are all the challenges we’ve had in the payments’ arena. When I first started advocacy work, swipe fees were front and center of everything that we talked about. It’s probably still one of the most FuelsMarketNews.com

I have an obligation to my

business and to my team members to stand up for our industry generally, and for The Hub specifically. important issues that we deal with on a day-to-day basis, and it needs more work. But, obviously, the environment on Capitol Hill has to be receptive to us working on that again.

Recently we have had liability, especially on the fuel side with the higher ethanol blends.

Developing safety protocols and liability protections against misfueling for legacy vehicles—things like that. There is the point of obligation argument (changing the “position holders” for RINS under the Renewable Fuel Standard). This is a very testy argument among many members in our industry. Those are the two that stand out to me on the fuel side.

FMN: What advice would you give someone who’s interested in becoming more involved in the legislative process?

Scheeler: It’s easy to garner inspiration by attending a Washington, D.C., event like NACS Day on the Hill. Most of the other trade associations that are related to our industry have their own fly-ins as well. I think that helps you see the big picture with more clarity.

FMN: How important is local politics?

Scheeler: I am a strong believer that the things FuelsMarketNews.com

that really affect us in our lives are going to happen at the local level. We get so caught up in what’s going on in the nation’s capital and who’s going to be president and such—which are important—but at the end of the day the more direct impacts are going to happen closer to home with zoning commissions, city commissions, school boards and state legislatures.

Get involved with those local governing bodies, develop relationships with them, familiarize yourself with the issues that are happening locally and then influence them the best way you can.

FMN: How do you start that process?

Scheeler: I believe that the most effective first step is by establishing a personal or professional relationship with elected officials, and not showing up as a stranger. It’s their job to listen to their constituents, but showing up as a stranger with no personal or professional connection makes it more challenging to get them to listen to you to the level that you would like.

FMN: How do you balance any partisan issues, or “which side to pick”?

Scheeler: I can go back to my Minnesota days for FMN Magazine WINTER 2021 | 43

All we can do is speak on

how an issue affects us, how it affects our businesses, our team members, our customers and our day-to-day lives. that one. Here in North Dakota, especially in the western part of the state, most elected officials are from one side of the aisle. What it comes down to is common-sense legislation, at least from our perspective. All we can do is speak on how an issue affects us, how it affects our businesses, our team members, our customers and our day-to-day lives. I think it’s important to take the politics out of it.

FMN: Do you fundraise or contribute to industry-friendly politicians?

Scheeler: I do fundraisers, and I make campaign contributions to people who have been friends of our industry and to the business community in general. I look at the contributions that I make as an expense that is vital to my business, just like investing in a piece of equipment. Sometimes you have to invest a little bit of money to put yourself in a position to have a strong relationship with someone who can impact your operations. Party affiliation should not matter—though it can—but if there’s a supporter of the industry it doesn’t matter what side of the aisle. And I think that’s the right way to look at it.

Scheeler: For me it’s our state elected officials—senate and house. Then our city commissions and our zoning commissions. A lot of what would affect our businesses is going to happen at those meetings. So many issues touch our industry that it’s important to keep a pulse on what’s going on at the city government level.

FMN: I would imagine if you don’t make an effort to do that you can miss out on important things that directly affect your business, and you find out about it after the fact.

Scheeler: One of the larger cities in North Dakota, just out of the blue through the city commission, decided it wanted to ban flavors on vape products. It came out of nowhere.

Nobody knew it was on the docket. It surprised the city and the state and the state trade associations related to this industry. Not enough people were keeping the pulse on it.

Keith Reid is editor-in-chief of Fuels Market News. He can be reached at kreid@fmnweb.com.

FMN: What are some of the state and local offices that you really want to concentrate on?

44 | FMN Magazine WINTER 2021

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INDUSTRY NEWS

CLEAN ENERGY SIGNS DEALS FOR OVER 58 MILLION GALLONS OF REDEEM RNG

Clean Energy Fuels Corp. announced new and extended contracts for more than 58 million gallons of Redeem renewable natural gas (RNG) to accommodate the continued demand for the sustainable fuel from key business segments including heavy duty trucking, solid waste and public transit. Clean Energy’s Redeem was the first commercially available RNG vehicle fuel, derived from capturing the biogenic methane produced by the decomposition of organic waste from dairies, landfills and wastewater treatment plants. Redeem reduces greenhouse gas emissions by at least 70% and even up to 300% depending on the source of the RNG, making it a negative carbon fuel.

ADD SYSTEMS ANNOUNCES PHONE SYSTEM INTEGRATION WITH SUPERIOR PROPANE

ADD Systems has announced a collaboration with Superior Propane to utilize the ADD Systems SmartConnect Phone Screen Pop functionality. The Phone Screen Pop module utilizes ADD’s portfolio of API (application programming interface) services, SmartConnect, to pull information from Superior Propane’s phone system into ADD’s back-office software. As a call is received, the Phone Pops API automatically “pops” the customer information on the screen for the incoming caller, allowing the Customer Service Representative (CSR) to begin assisting the customer immediately. This saves time and allows the CSR to help more customers in a given period. The seamless process reduces call time and enhances the end customer’s overall experience.

PDI AGREES TO PURCHASE CYBERA AND CONTROLSCAN MANAGED SECURITY SERVICES

PDI, a global provider of ERP, fuel pricing, logistics and marketing cloud solutions for the convenience retail and petroleum wholesale industries, has agreed to acquire Cybera, a leading provider of network and security solutions. PDI has also entered into an agreement with ControlScan to purchase its Managed Security Services. According to the NACS member company, data breaches and payment security top the list of major issues affecting today’s convenience industry.

PDI’s growth strategy has been focused on expanding and 46 | FMN Magazine WINTER 2021

enhancing its solutions portfolio to serve the needs of convenience retailers and multi-site operators as they pursue their digital transformation strategies.

VP RACING FUELS EXPANDS BRANDED RETAIL DISTRIBUTOR NETWORK

VP Racing Fuels has expanded its distributor network in the Midwest offering a branded program with fuel supplied by Flint Hills Resources. This brand offers a one-stop shop for general consumers and automotive enthusiasts. For distributors, the VP program offers more flexibility than the typical major brands. For dealers, VP offers independence and revenue growth that no other brand can. Currently, the program is offered in Iowa, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin and is seeing strong adoption from key dealers and distributors. Two additional distributors have signed on to the new branded program and are actively marketing the brand throughout the Midwest: HTP Energy (Onalaska, Wisconsin) and Dooley’s Petroleum (Willmar, Minnesota).

P97 NETWORKS AND VISA'S CYBERSOURCE FORM GLOBAL PARTNERSHIP

P97 Networks, a leader in cloud-based mobile commerce, and Visa’s global payment and fraud management platform, Cybersource, announced a multiyear global partnership to deliver best-in-class mobile payment acceptance tools with built-in integrated risk management for convenience and fuel retailers. The partnership will scale and expand P97’s PetroZone cloudbased mobile commerce platform internationally, with first implementations in Asia Pacific, Middle East and North America expected over the next 12 months. The P97 and Cybersource partnership will accelerate the digitalization of the fuel retail segment with the PetroZone mobile commerce platform, which enables drivers to have a seamless digital payment experience.

FuelsMarketNews.com

INDUSTRY NEWS

DOVER FUELING SOLUTIONS RELEASES MAGLINK LX 4 CONSOLE

Dover Fueling Solutions, a part of Dover Corp. that delivers advanced fuel dispensing equipment, electronic systems and payment, fleet systems, automatic tank gauging and wetstock management, has launched its next-generation console, the ProGauge MagLink LX 4. The tank gauge console supersedes the previous MagLink LX model and features several upgrades and enhancements, including state-of-the-art “touch and swipe” technology, resulting in a truly immersive and interactive experience for the user. Coupled with enhanced graphics, including realistic three-dimensional storage tank renders that give an accurate visualization of the fuel stored in underground tanks, this technology enables fuel retailers to glide between screens, zoom in and activate buttons to easily view all tank data instantly.

SKYBITZ LAUNCHES SATELLITE-BASED REMOTE TANK MONITORING

SkyBitz, a leader in IoT telematics solutions, launched its new satellite-based tank monitoring solution, providing global data-monitoring capabilities to customers with tanks operating in remote locations that are outside of consistent cellular coverage areas. The ST90 SAT from SkyBitz delivers highly accurate tank information 24/7, all at a low cost of ownership, based on a long-lasting service life thanks to a solar-rechargeable battery. With a host of unique datadriven features available through the SkyBitz SMARTank platform, users gain access to tank location via GPS functionality, historical usage reports, tank level data, inventory temperature, rate of consumption data and other easily programmable threshold-based notifications and alerts.

BENNETT PUMP AND INFONET COMPLETE EMV LEVEL 3 CERTIFICATION FOR PAY-ATTHE-PUMP AT HARMONS FUEL STOPS

Harmons has begun deploying EMV chip card compliant payment on Bennett Pacific dispensers utilizing Infonet’s C-Store Commander. The level three EMV certification was completed on September 10, 2020, on the Fiserv/First Data network. Harmons will roll out EMV chip card payment and contactless NFC (near field communication) at the forecourt across its entire network by year end. Bennett Pump Company is a leading manufacturer of fuel dispensing equipment for retail, commercial and clean fuels technology.

FuelsMarketNews.com

LEIGHTON O’BRIEN LAUNCHES COMPLIANCE PLUS DIGITAL UST TESTING PLATFORM IN 44 STATES

Leighton O’Brien has launched Compliance Plus, a singlesource digital testing platform for line, containment and leak detector testing. Compliance Plus brings together three technologies including Leighton O’Brien’s precision integrity tank and line test, Dri-sump (a faster and more convenient alternative to hydrostatic containment testing) and the LDT-890D/AF leak detector test—the only certified test for all catastrophic leak detectors. The comprehensive testing platform follows global licensing agreements with AC’CENT Environmental Services Inc., developers of Dri-sump® technology, and Vaporless Manufacturing Inc. to distribute and market its industry-leading line leak detector testing system. The LDT-890D/AF leak detector tester can generate the EPA-mandated three gallons per hour at 10 pounds per square inch leak and, unlike other equipment, it automatically compensates for different fuel viscosities.

INVENCO RELEASES EMV PAY-AT-PUMP RETROFITS USING CONEXXUS FORECOURT PAYMENT TERMINAL V1.0 PROTOCOL

Invenco, a global provider of self-service payment technology and secure customer engagement solutions, is installing EMV pay-at-pump retrofit kits based on the recently enacted Conexxus Forecourt Payment Terminal 1.0 Protocol. The protocol was developed to simplify the communication between EMV pay-at-pump terminals and inside store systems. It also helps to reduce the complexity and cost associated with certifications to maintain EMV payment systems, which are required more frequently than previous magnetic stripe solutions. Invenco and Conexxus have been long aligned in advocating for a standard, open communication interface between store systems, including forecourt and payment systems. By implementing a standard of communication, the ability for retailers to implement new operational strategies becomes significantly faster and easier.

FMN Magazine WINTER 2021 | 47

INDUSTRY NEWS

STUZO WORKS WITH NCR TO ADVANCE CONTACTLESS COMMERCE IN CONVENIENCE AND FUEL RETAIL

Stuzo, a leading provider of intelligent 1:1 loyalty, contactless commerce and modern digital storefront technology for convenience and fuel retailers, announced that NCR Corp. has certified its Open Commerce Transact product, inclusive of its Mobile Payment Processing Application with NCR’s point of sale systems for contactless digital payments. The integration between Open Commerce Transact and NCR enables contactless digital payment experiences for pay at pump, pay in store at the POS and pay for car washes. Additionally, utilizing NCR’s open APIs with Open Commerce Transact, buy ahead and mobile self-checkout for store merchandise becomes an option for retailers to enable in-store pickup, curbside pickup, forecourt delivery and/or offsite delivery.

COMDATA INTRODUCES VEHICLE LOCATIONBASED AUTHORIZATION TO HELP COMBAT FLEET FUEL FRAUD

Comdata Inc., a FLEETCOR company and a world leader in payment innovation solutions, launched the next generation of Enhanced Authorization Controls, a digital solution that helps prevent fuel fraud in the fleet industry. For decades, Comdata’s Enhanced Authorization Controls have helped limit and prevent both driver and third-party fuel fraud losses. The latest evolution of this system now combines real-time truck location, tank capacity and tank level data into the fuel card authorization process to help prevent financial losses related to card fraud and driver theft. This new product feature makes the “invisible, visible” by integrating real-time GPS/ELD vehicle location, merchant location and vehicle diagnostic data seamlessly with Comdata’s fuel card authorization platform to help detect and prevent driver misuse and fraud.

NESTE, TWIN RIVERS UNIFIED SCHOOL DISTRICT TRANSFORM SCHOOL BUSES TO RENEWABLE DIESEL

The Twin Rivers Unified School District near Sacramento achieved a major milestone in its climate action plan by switching 75 diesel-powered school buses to run on renewable diesel fuel provided by Neste. As a result, the district’s 48 | FMN Magazine WINTER 2021

fleet is now fully fossil free and one of the cleanest in the country. Because Neste MY Renewable Diesel is a drop-in fuel, Twin Rivers was able to achieve this milestone practically overnight. Neste’s renewable diesel fuel is made from renewable and sustainably sourced waste materials, such as used cooking oil, rendered fats and grease.

ENERGYEXITS ADVISES ON CROSS PETROLEUM SALE

EnergyExits, an independent M&A advisory focused on the energy distribution sector in the Western United States, announced it advised Cross Petroleum and related real-estate entities on the sale to Valley Pacific Petroleum Services (VPPS) of 65 open dealers, seven bulk plants and seven cardlock facilities in Northern California.

Headquartered in Redding, California, Cross Petroleum enjoys a strategic marketing area spanning 230 miles at the center of the West Coast’s important Interstate 5 transportation corridor, halfway between Vancouver, British Columbia, and Tijuana, Mexico. The company distributes wholesale fuel, bulk fuel, lubricant products and home heating fuel to a semi-rural customer base between the Sacramento Region and the Oregon border.

PENN TANK LINES ACQUIRES STARDUST TRANSPORTATION

Penn Tank Lines Inc. has acquired Stardust Transportation LLC, a leading aviation gasoline and jet fuel transportation company based in Fishers, Indiana, Matrix Capital Markets Group Inc., a leading independent investment bank, announced. Penn Tank Lines, headquartered in Chester Springs, Pennsylvania, is a bulk petroleum and flatbed transportation company.

It has been delivering fuel and providing superior customer service since 1974, when it was founded by current Chairman and CEO Jack McSherry. The company has grown over the years through numerous acquisitions and affiliate relationships and currently serves customers in the eastern United States. Stardust Transportation was founded in 2000 by its president, Thomas Harris, and has grown into one of the largest and most reliable specialty fuel transportation providers of aviation fuels in the country. Stardust serves primarily airline, airport and government customers throughout the Midwest, Texas and Florida.

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A new year, offering tremendous opportunities.

With a full line-up of virtual and live programming in 2021, NACS has something for everyone.

convenience.org/events

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NACS Convenience Summit Asia March 29-April 2, 2021 Virtual

NACS Convenience Summit Europe June 1-3, 2021 Dublin, Ireland

Government Relations NACS Day on the Hill March 23-24, 2021 Live Virtual

NACS In Store

Throughout 2021 Stay tuned...

May 2-7, 2021 Richmond, VA

NACS Financial Leadership Program* July 11-16, 2021 The Wharton School University of Pennsylvania Philadelphia, PA Endowed by: Cash Depot

NACS Marketing Leadership Program* July 25-30, 2021 Kellogg School of Management Northwestern University Evanston, IL Endowed by: Frito Lay, Keurig Dr Pepper, Nielsen

NACS Women’s Leadership Program*

October 31- November 5, 2021 MIT Sloan School of Management Cambridge, MA Supported by: Gilbarco Veeder-Root, Mondelez, PDI, Shell

Staff | Operations NACS Human Resources Forum March 9-11, 2021 Live Virtual

Industry Insights & Data NACS State of the Industry Summit April 13-14, 2021 Virtual

NACS Executive Leadership Program* July 25-29, 2021 Dyson School Cornell University Ithaca, NY Endowed by: Reynolds

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50 | FMN Magazine WINTER 2021

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CARING TOGETHER Convenience stores are at the heart of every community. Let’s make that known. The NACS Foundation amplifies the good work being done by demonstrating the collective and positive impact being made by you across the country.

Join us today. conveniencecares.org

REMEMBER THIS?

Representing Independent Oil Men

BY KEITH REID

N

PN was founded in May 1909 as the voice of the independent oil industry. The tagline was direct: Representing Independent Oil Men. At the time, that was primarily small independent refineries and petroleum product distributors. The primary opposition to the independents was John D. Rockefeller’s Standard Oil Company.

At its peak, Standard Oil controlled 85% to 90% of the oil industry from production to sales (though that had slipped by the time it was broken up in 1911 under the Sherman Antitrust Act). Major objections went beyond natural advantages, such as economies of scale. “The Standard” also leveraged its position and relationships in the logistics infrastructure (rail and pipelines) to lock out competitors.

The battles against Standard Oil were contentious and worked their way from numerous state legal and legislative challenges to the U.S. Supreme Court.

Just how contentious? An article in the November 1909 issue had the whimsical (and pirate-themed) headline “Ach! Standard Would A Duel Fight-R-R-R-RR” with the following lede: “The Standard Oil Company is challenging its European ‘muckrakers’ [investigative journalists] to duels—real duels with swords and

pistols that will spill blood. But the wily ‘muckrakers’ have sent their ‘regrets,’ gently insinuating, at the same time, that the Standard’s method might kill off the witnesses against it.”

NPN and the Independent Oil Marketers’ Association spent many of the modern industry’s early years not just opposing Standard Oil but also fighting numerous regulatory and legislative actions at a level not seen today. The oil industry was a “Wild West” where the rules were being developed on the fly, pitting numerous players and interests against each other.

A rough estimate would be that at least a third of NPN’s content from the first issue until at least the 1940s involved legislative and regulatory battles. In later years, this was often between retailers and jobbers and their oil companies’ marketing practices.

Through those battles industry members were called upon to pull their weight.

IOMA ran the following announcement in the January 1910 issue: TO INDEPENDENT OIL MEN Gentlemen:—Take three minutes of your time NOW and boost the national legislative campaign for the enactment of our AntiDiscrimination bill. If you reside in Ohio,

New York, Massachusetts, Rhode Island or Virginia —where the bill will be introduced this winter—write the representatives and senator from your district. If you do business in any of these states but live outside them, address letters to the Senate and House of Representatives of those suites, and ask that the letters be read to those bodies and inserted in the records of their proceedings.

TELL YOUR REPRESENTATIVES AND THESE LEGISLATIVE BODIES THAT THE SMALL COMPETITOR MUST HAVE, AND HE DEMANDS, THE ENACTMENT OF TIIIE LAW: THAT HONEST COMPETITION IN THIS COUNTRY REQUIRES THIS PROTECTION FROM THE AVALANCHE OF DOLLARS THAT A TRUST CAN POUR DOWN ON THE SMALL BUSINESS MAN AND CRUSH HIM: AND THAT HONEST COMPETITION MEANS BETTER GOODS AT FAIRER PRICES TO THE CONSUMER—THE VOTER. Keep in this fight until these bills are passed. Keep after your legislative representatives until they not only UNDERSTAND the bill, but are WORKING for it. Take time and talk to them personally.

Responses received from them, as the result of our campaign so far, show that they want to know, that they want to give the small competitor a Square Deal. Don’t lay aside this paper to write these letters tomorrow, but write them NOW. Very truly yours, Springfield, Mass., Thos.

L. Hisgen, President, Jan. 5, 1910. The Independent Petroleum Marketers’ Assn.

That was solid advice in 1910, and the central message of personally fighting for your company and livelihood through the political process is just as relevant today.

Keith Reid is editorin-chief of Fuels Market News. He can be reached at kreid@fmnweb.com.

For more than 100 years, from its founding in 1909 to when it went out of business in 2013, National Petroleum News (NPN) documented the rise of petroleum marketing and retailing in the United States. NACS, PEI and The Fuels Institute have catalogued the rich history of NPN in its entirety. Each issue of Fuels Market News will look back at the history of our vibrant industry, through the eyes of NPN, to see how it reflects the issues, challenges and opportunities we face today.

52 | FMN Magazine WINTER 2021

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