On-Demand Fueling will succeed – because it already has. On-Demand Fueling is simply onsite mobile refueling 2.0. It is the natural progression of a business model developed many years ago. If you are wondering how long mobile refueling has been around, then look no further than Dan Abrams’(Chairman of Diesel Direct) personal history of the industry…
“My earliest recollection of mobile refueling dates back to 1952 when I was six years old. My Dad had a one truck heating oil business and he would park the truck at Mulherns Sunoco Station on Route 9 in Newton, Massachusetts. Parked next to my Dad’s truck was a fellow named John Casey, who owned and operated a dump truck. One day I noticed my Dad filling John’s fuel tank from his oil truck. That was my introduction to onsite mobile refueling.”
I’m not sure exactly when mobile fueling began, but it’s pretty safe to say it’s been around for at least half a century.
He goes on to outline the way fleets used to fuel their operations…
“Diesel powered trucks generally obtained their fuel primarily from three different sources. The first source was truck stops throughout America that catered to the over-the-road truck operators and fuel stations that carried diesel fuel at spotted locations across the country. Fuel card services sprung up to cater to these truck operators by stringing together diesel fuel sites where the cards would be accepted. The second source was underground tanks on site at a vehicle operator’s domicile. This method was primarily used for large fleets that could afford the investment of a fuel system that could typically accept bulk deliveries up to 10,000 gallons. The third option was to purchase fuel from a fleet operator’s truck leasing company. Regardless of the source, the common denominator was labor. It takes time to drive to a destination and refuel a vehicle.”
Note that last sentence. Sounds a lot like the situation today’s auto owners face, doesn’t it?
Abrams then discusses when the industry began experiencing significant growth…
“By 1997 many companies that delivered heating oil jumped into the fledgling industry of on site refueling. The industry gained traction around 2000 and expansion of the idea gained popularity across the nation. Companies that traditionally fueled at truck stops began to obtain more of their fuel from the mobile refueler. New companies sprung up that were dedicated just to this industry along with heating oil companies starting new divisions that could redeploy existing assets at night, that were used for delivering heating oil in the daytime”
Hmmm, “new companies sprung up dedicated just to this industry”? Deja Vu all over again.
So what are these new on-demand fueling companies doing that is different? Simple – they are addressing a market that was previously ignored and deemed unprofitable due to its logistical challenges and inefficiencies. Can they overcome these hurdles and make money in the process? My prediction is they will. Our industry has a long track record of using technology to its advantage. Just look at what’s happened in the last 5 years in the oil fields.
I think the real question is how the rest of the downstream sector will handle new entrants in the marketplace.
Dan goes on to conclude, “The market for on site refueling is growing up. It has certainly been through its adolescent period and is now an industry of consolidation. Technology, efficiency and best practices are making great strides to ensure that the cost effective fuel delivery method is a permanent part of the nation’s fuel distribution system.” Those words were written in 2012.
Well said.
What was your first experience with on-site refueling?
Note: All quotes appearing in this article were sourced from the OPIS Fleet Fueling Special Supplement, May 2012. Emphasis added (underlining).
This is the second article of the series. You can read the previous article – Part 1 – It’s not about disruption, it’s about segmentation. Or continue reading Part 3 – It’s not about the Fuel.