Tank monitoring vendors are vying for market share while fuel marketers that have invested in the technology tend to carefully consider what tanks to monitor.
Santa Energy, Bridgeport, Conn., has tank monitors installed on approximately 1,000 accounts, says Scott Santa, customer experience manager. The fuel dealer targets accounts that have fluctuating propane usage that makes consumption harder to predict. It also focuses on accounts with certain types of equipment and appliances. “Generators and pool heaters are probably the top two that are very hard to predict,” Santa says. “We require the customers that use those appliances to have a tank monitor so that we know when to go out and fill the tanks,” Santa says. The company uses a tank monitoring system supplied by Wesroc Monitoring Solutions.
For the end customers, “the real selling point” is avoiding a runout, Santa says. “We’re required to go out and do a safety check before we’re allowed to turn those tanks back on,” Santa notes. “That safety check costs anywhere between $100 and $150, whereas the tank monitor lease fee is significantly less. So, consumers can use monitoring to help them avoid that charge.”
Santa pointed out that the Wesroc system’s app appeals to customers because they can go to their phones and see their daily usage and receive an alert when fuel is getting low—or below a certain level that they wish to maintain.
“It makes the customer experience all that much better,” he says.
Wesroc last year acquired the EnerTrac tank monitoring system from Senet, Portsmouth, N.H. The acquisition gives Wesroc access to the LoRa wide-area network in North America. LoRa is a low-power network on a proprietary frequency, used by municipalities, cities, and smart grids. Wesroc has built and is currently testing a new LoRa-enabled device for tank monitoring, which will enable large-scale deployments at lower cost than if the device relied on cellular communication, says Boyd McGathey, chief operating officer for Wesroc Monitoring Solutions, Blair, Neb. Instead of installing monitoring selectively, he says, “you can do every tank.”
Another fuel marketer, Wilcox Energy, Westbrook, Conn., started using a tank monitoring system in October 2016 and currently has monitors on 182 tanks, says Dave Foster, a co-owner of the company.
“Tank Utility tells us the average cost in the industry is $65 per drop,” Foster says, referring to the Boston-based company that provides the monitoring system.
“In the beginning, they did a cost analysis for us,” Foster says, identifying customers who were prime candidates for tank monitoring. “We put them on, and we’ve been adding ever since,” Foster says. What makes a customer a prime candidate for tank monitoring?
“Usually, if they’re up to around seven deliveries a year,” Foster says. “If they have two one-twenties, I put it on. That’s easy. I know we’re going to save money.” If he’s confident the system will help him eliminate two deliveries per year for an account, he puts a monitor on, figuring he’s saving $130 a year. “If they have a five-hundred or thousand-gallon tank I may not.”
Wilcox Energy’s operating area includes a stretch of the Connecticut shoreline. The fuel dealer’s customer base includes summer homes—some that have swimming pools and other amenities.
“They’re kind of unpredictable because we never know when they’re coming back for the holidays or someone’s using the house,” Foster says. “All of a sudden they’ve got the in-laws staying at the house for three weeks and the usage goes up.” Monitoring is “nice to have” for those situations, Foster says, “but it is a choice that you have to be careful about because it’s an expense that you didn’t have before.”
Typically, the fuel dealer doesn’t charge for the monitor or cell service “We’re doing it for efficiency and less expenses on our delivery side,” Foster says.
“The only downside really is the cell service floundering in tough spots and in some spots [where] you just can’t get service.”
Wilcox Energy has only one customer whose monitor depends on Wi-Fi, Foster says. “Wi-Fi falls off all the time in the house and [the customer has] to reset everything,” he says. “So, unless they’re computer literate it’s a pain.” Of his one customer on Wi-Fi, Foster says, “he’s pretty competent. He downloaded the app and checks it himself.”
According to Tank Utility, Wilcox Energy is delivering to propane tanks, on average, when they are 26% full, allowing average deliveries of 54% of tank capacity (80% being the maximum allowable fill for propane tanks). That “fill rate” is higher than most, according to Tank Utility CEO Amos Epstein. “In most cases fuel dealers are only delivering about half the tank capacity,” Epstein says.
The percentage of tanks in the industry that are monitored is estimated to be anywhere from 3% to as much as 10%, according to estimates by Epstein and other vendors.
“It’s a very under-penetrated industry so far,” says Henry Popplewell of SkyBitz, Atlanta, Ga. Amid a proliferation of Internet of Things (IoT) devices and telematics products a lot of companies are targeting the monitoring needs of business, he says.
In the fuel distribution business, considerations of deployment are ruled by projected return on investment, Popplewell says. “Those locations that have the most obvious and straightforward ROI should get the immediate deployment,” he says. “And those are locations that are more problematic—whether it’s a very wide geographic area or inconsistent usage or fluctuating demand, it makes sense to attack the problems first.”
Over time, wider deployment is likely to be driven by the value of the data that a system delivers, Popplewell says.
Beyond issuing alerts, Popplewell says, software that is easily navigated to generate customized reports helps fuel dealers orient and execute.
SkyBitz’s system enables integration of tank monitoring data with dispatching and route planning software, and with fuel management software for fleet vehicles, Popplewell says.
David Montgomery, customer relationship manager for Angus Monitoring Service, began a recent webinar by saying, “Each company has a different motivational factor behind why they’ve decided to look into purchasing tank monitors. We know that delivery costs are the number one biggest expense that any company faces, and that handling deliveries well is not just a matter of reducing expenses…”
Unless a fuel dealer can stop guessing at what’s in a customer’s tank, Montgomery says, “it is impossible to achieve substantial results—especially since estimating with k factors has become less and less reliable.”
An instant poll conducted during the webinar asked attendees to identify the top two reasons they were pursuing tank monitors. Eliminating runouts and creating “stickier” customers were the top two.
A recent national study of monitors found average propane delivery was just 41% of capacity, Montgomery said during the webinar.
The same study found that the average oil drop for a 275-gallon tank was 142 gallons, Montgomery said. “There would be a huge benefit to improving those numbers,” he said.
Otodata, based in Montreal, is a new entrant in the U.S. market this year. Otodata’s hardware contains two SIM cards, allowing Otodata to switch its monitoring system from AT&T to other carriers dynamically, says Andre Boulay, Otodata’s president. The design is “not only to make sure the unit has communication capabilities, but to optimize the battery life” to more than ten years, Boulay says.
On June 22 Otodata introduced a function on its app, Nee-Vo, that enables fuel marketers to conduct interactive marketing campaigns with customers, using it to market services such as furnace maintenance, for example. Fuel marketers can feature their name and incorporate their colors throughout the app, and they can allow customers access to tank data. “Our objective is for fuel marketers to gain visibility to the end users,” Boulay says.
“How Tank Monitors Could Have Helped Last Winter,” was the title of a seminar at the Eastern Energy Expo in May, where speaker Daniel Warren of SkyBitz Petroleum Logistics advised that a complete tank capacity database is critical to successfully managing deliveries.
Steve Williams, founder and president of Connected Consumer Fuel, Ridgefield, Conn., said in the same seminar that reinforcing or establishing loyalty in a will-call customer can be a benefit of monitoring. A fuel marketer who receives an alert that the fuel level in a tank is low can call the will-call customer before that customer has a chance to shop around, Williams said.—Stephen Bennett