Fuels Market News Summer 2020

SUMMER 2020

NO RECOVERY IN SIGHT? The COVID-driven collapse of fuel demand and fuel prices lingers.

Where Do We Go From Here?

14 Predictions Food Trucks Take a Detour at Rest Stops

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SUMMER 2020

34 COVID-19: Fuel Demand COVER STORY

and Job Destruction Don’t expect a serious price rally until demand picks up and overflowing inventories begin to shrink.

By Dr. Nancy Yamaguchi

42

A Cloudy Crystal Ball Fourteen predictions for the next 12 months of convenience retailing.

By Roy Strasburger

46

How Food Trucks Ended Up at Rest Stops— For a While Regulators relaxed the rules during COVID-19, but the change isn’t permanent.

By Keith Reid

FuelsMarketNews.com

FMN Magazine SUMMER 2020 | 1

04 From the Editor 06 NACS 08 Fuels Institute 10 Fueled for Thought RETAILER OPERATIONS 12 D elivering on ‘Retail Basics’ When

It Matters Most Clean stores attract more customers because they convey safety and security.

14 T he Path to Profit

Six ways new car washes can fully leverage strong distributor relationships.

14

18 F ueling Bugaboos

Meter loss, slow-pumping dispensers and down dispensers can siphon off retailer profits.

COMMERCIAL FUELS 20 A Year in Review

Key findings from this year’s Best Fleets to Drive For program.

22 M odernizing the Nation’s Truck Fleet

Suspending the FET to get more new trucks on the road is the path to a green recovery.

24 A Fluid Situation

20

Exploring DEF supply and market ramifications during the pandemic with Integer Research.

FUEL MARKETERS 28 G ood Business

How to optimize the fuel logistics puzzle.

30 S ales in the Time of COVID

Ten ways to approach selling that will catapult you past your competition.

50 Industry News 56 Remember This?

30 2 | FMN Magazine SUMMER 2020

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FROM THE EDITOR

Great Things to Come

T

he year is half over and it has been a terrible one, for reasons I don’t need to explain. But not all that has transpired has been bad. In May, FMN was acquired by NACS, which is a very good thing.

NACS was looking for opportunities to further solidify its position in the market to better serve its members and expand its audience. At FMN, we had reached a plateau where something had to happen to move to the next level.

Our publisher, Gary Bevers, moved on to other industry pursuits after the acquisition, while I was happy to continue my role under our new leadership.

What does this mean for our dedicated audiences of wholesale marketers, retailers and commercial fuel buyers? I can comfortably say it’s going to be great.

For starters, we are enhancing and transforming our newsletters, fuelsmarketnews.com and print publication in appearance, content and circulation. If you look through this issue, you will see some changes in our print magazine—which in addition to the new look will be expanding its circulation. If you do not already receive the print magazine, look for coming opportunities to subscribe at www.fuelsmarketnews.com/ subscribe-fmn.

Content-wise I have relied on insight from NACS for a range of expertise since I first entered the industry as an editor for NPN Magazine in 1999.

Now, together, we are even more wired into the pulse of the industry. FMN will continue to draw on a diverse array of industry voices for the myriad issues we tackle with each year.

We will also be leveraging NACS’ relationship with The Fuels Institute, which is doing excellent work identifying future fueling trends.

4 | FMN Magazine SUMMER 2020

EDITORIAL

Now, together, we are even more wired into the pulse of the industry.

Speaking of NPN, it ceased publication in 2013 with me as its last editor, and FMN was launched to fill that void. NPN documented more than 100 years of industry history dating back to the Rockefeller Standard Oil days. When I was editor there, I would look through some of the numerous encyclopedia–to dictionary–size bound books and marvel at the raw history preserved within those thousands of pages.

As NPN was winding down, NACS and PEI purchased the NPN archive and digitized the issues, creating an easily searchable database. We will be pulling content from that archive on a regular basis, so don’t miss our first effort—a look at the industry from the pages of NPN during the height of the Spanish Flu in 1918—on the back page of the magazine.

That is just one example of the great things to come. I hope you enjoy the ride.

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 Eichberger, Sid Gaitonde, John J. Kimmel, Mark Murrell, Joe O’Brien, Brian Reynolds, Allen Schaeffer, Roy Strasburger, Mark Tentis, Nancy Yamaguchi, Mike G. Zahajko DESIGN Beyond Definition www.beyond-definition.com

ADVERTISING Bill Kaprelian (262) 729-2629 bkaprelian@fmnweb.com

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 © 2020 by the National Association of Convenience Stores. Periodicals postage paid at Alexandria VA and additional mailing offices.

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

He can be reached at kreid@fmnweb.com.

1600 Duke Street, Alexandria, VA, 22314-2792

FuelsMarketNews.com

COVID-19: Health & Safety Info

NACS Fuels Resource Center

You can read the latest information, view resources, such as guidance for emergency planning and response, and learn about safety precautions and employer guidance at www.convenience.org/coronavirus.

Fueling up is so easy and so convenient that just about every one of the nearly 40 million Americans who fill up every day don’t think twice about it, unless things aren’t as easy or convenient. NACS’ Fuels Resource Center gives you an insider’s view of how fuel is produced, refined and ultimately sold at convenience stores across the United States, as well as a look at some of the issues that could affect an otherwise easy and convenient fill-up. NACS also provides consumer insights into the fueling industry through reports, such as NACS annual consumer fuels survey and habits of gas-buying consumers.

Learn more at www.convenience.org/fuels.

6 | FMN Magazine SUMMER 2020

FuelsMarketNews.com

ILLUSTRATION©ISTOCK/MIAKIEVY/ OLEKSANDR HRUTS PHOTO©ISTOCK/BIZOO_N

NACS knows the health and safety of your employees and customers is top priority—just as the health and safety of the convenience retail community is top priority for us. We are actively monitoring the COVID-19 crisis, keeping in touch with local, state and federal agencies, health experts, employment law firms, event venue partners, retailers and suppliers as conditions evolve.

NACS Show: Register Today Registration is open for the 2020 NACS Show to be held October 11-14 at the Las Vegas Convention Center in Las Vegas, Nevada. The NACS Show provides the most comprehensive representation of products and services for the convenience and fuel retailing industry. Fuel marketers and other retailers come to the NACS Show to discover proven ideas and strategies that enable them to increase sales, attract new customers, build their brand and improve their bottom line. Suppliers exhibit at the Show to establish a presence in the convenience channel, obtain sales leads, increase product exposure and introduce new products. Last year, more than 23,500 people attended the NACS Show from almost 70 countries, and more than 1,200 companies exhibited.

Register today at www.nacsshow.com.

While the Show is a few months away, our preparedness plans are evolving daily in light of new guidance on COVID-19. NACS is taking precautions and proactively running contingency scenarios to guarantee we deliver the same high-quality networking, access to new products and thought leadership you’ve come to expect—without jeopardizing anyone’s well-being. Enhancements to the 2020 NACS Show will be posted under our FAQ page in real-time.

Learn more at www.nacsshow.com/FAQ.

2020 August 9–14 NACS Leadership for Success Glen Allen (Richmond), VA

OCTOBER 11-14

NACS Show and PEI Convention at the NACS Show Las Vegas, NV FuelsMarketNews.com

NACS Women's Leadership Program Yale University, New Haven, CT

of people will go out of their way to shop at a store they like

63% of people will go out of their way to find a store with low gas prices

SOURCE: NACS CONSUMER FUELS SURVEY

NACS and FMN Calendar of Events OCTOBER 25-30

72%

For the most up-to-date information on event cancellations, please visit www.convenience.org.

NOVEMBER 1-6

NOVEMBER 1-6

NOVEMBER 1-6

For more information about these NACS and FMN events, visit www.convenience.org/ events.

NACS Financial Leadership Program Wharton School of Business, University of Pennsylvania Philadelphia, PA

NACS Marketing Leadership Program Kellogg School of Business, Northwestern University Chicago, IL

NOVEMBER 1-5

NACS Executive Leadership Program Cornell University Ithaca, NY

NACS Innovation Leadership Program Massachusetts Institute of Technology, Boston, MA

FMN Magazine SUMMER 2020 | 7

Crazy Train

BY JOHN EICHBERGER

A

s the world begins to reopen following the coronavirus pandemic, there are many unanswerable questions about the future of transportation.

Will the trends that prevailed as we entered 2020 resume their normal trajectory, or has the economic shutdown altered the course of the market? Will consumers, unleashed from their stay-at-home orders, flood into the streets to pick up exactly where they left off, resurrecting demand for transportation energy, or will their newly adopted behaviors and concerns about personal health result in a more measured resumption in economic activity? Will organizations who have now experienced the potential of telecommuting employ more flexible work paradigms and potentially reduce the footprint of their offices, or will the rush-hour commute return with a vengeance? And how in the world can I prepare my organization for the future when I am surrounded by such uncertainty? Nobody has all the answers, but the Fuels Institute’s FUELS2020 Virtual Experience provided some perspectives to help us navigate the muddy waters ahead.

CONSUMERS EMBRACE PRIVATE VEHICLES The FUELS2020 Virtual Experience kicked off with an assessment of consumer attitudes relative to transportation and mobility. Ryan Robinson with Deloitte shared findings from the research firm’s Global Automotive Consumer Survey and added new perspective drawn from their Global State of the Consumer Tracker. One of the key findings earlier this year was the decline in people who frequently use ride-hailing services. In the U.S., only 11% of consumers reported using such services at least once per week, compared with 23% who said so in 2017. The number of people who claim to never use such services dropped significantly from 55% to 38%.

This trend matches pretty well with what Deloitte has discovered in the wake of the pandemic about people’s opinions about their vehicles. Nearly 80% of Americans surveyed in the final week of April said that the idea of owning their own car was valuable to them, and nearly 60% said they plan to limit their use of ride-hailing services. A recent KPMG consumer survey found nearly half of the customers who were planning to buy a vehicle in the next six months are more likely to make that purchase due to the coronavirus. Other surveys FIGURE 1 | Frequency of Ride-Hailing Usage

1+ per Week

Rarely

Never 0%

10%

20%

30% 2020

8 | FMN Magazine SUMMER 2020

2017

40%

50%

60%

SOURCE: DELOITTE

indicate consumers are more comfortable with the idea of using their own vehicle over any type of shared mobility option. How long they will feel this way remains to be seen, but the shift was already occurring before the pandemic, and it seems as if recent experience has accelerated the shift back to personally owned vehicles.

(The majority of people plan to limit their use of mass transit as well.)

TELECOMMUTING COULD REDUCE EMISSIONS Once the dust settles and we are able to refocus on issues beyond the pandemic, the debates will return to which policies will be most successful in protecting the environment from transportation-related emissions.

Earlier this year, the Fuels Institute hired Ricardo Consulting to conduct a comparative analysis of various strategies to determine their effect on criteria pollutant emissions, greenhouse gas emissions and the economy.

For FUELS2020, Aneesh Padalkar provided a sneak peek at what they have learned to date. (The final report is due to be published summer 2020.)

With a keen eye to the current market situation, Padalkar shared analysis of the impact telecommuting might have.

If more businesses adopt a telecommuting policy, how might that affect air quality in the long term? Padalkar shared that, according to the University of Chicago, it is estimated that about 37% of the American workforce can feasibly complete their work from home.

If these people were to telecommute just one day per week, it would save each of them about $150 in fuel expenses and reduce national tailpipe emissions of CO2, NOx and PM2.5 by 5%. That is a significant drop in emissions without a major price tag affixed to it.

CRUDE OIL SUPPLY-DEMAND BALANCE The global economic shutdown crippled demand for transportation fuels. At the same time, an oil price war between FuelsMarketNews.com

FIGURE 2 | Emissions Reduction Due to Telecommuting

1 DAY/WEEK

15% Emissions Reduction

to be just a blip on the trajectory.

Guidehouse expects the EV market to recover quickly and reach that 2025 projection despite the pandemic’s impact on 2020. One of the major driving forces behind EV market development is government policy, which is not slowing down and in some markets is becoming even more aggressive.

( % EMISSIONS REDUCTION COMPARED TO 2020 BASELINE FOR CO2, NOx, PM2.5) 3 DAYS/WEEK

5 DAYS/WEEK

10% 5% 0% -3%

10%

20% % U.S. Workforce Telecommuting

30%

37%

SOURCE: RICARDO CONSULTING

FIGURE 3 | HEV, PHEV, BEV and FCEV Sales (World Markets) 16 14

Millions

12 10 8 6 4 2 0 2005

2010

2015 PRE-COVID

Saudi Arabia and Russia exacerbated an already-struggling market. The combination resulted in West Texas Intermediate crude futures trading far below $0 per barrel in mid-April. How long will it take for the market to stabilize? Debnil Chaudury with IHS Markit shared a pretty optimistic forecast.

IHS Markit projects the oil market to recover rapidly and reverse the current oversupply situation by as soon as the third quarter of 2020. This is due to a combination of reduced production in many regions of the world and a significant recovery in demand.

Chaudury forecast that demand for oil would return to pre-COVID levels by the end of 2021. Of course, he acknowledged that a rebound of the pandemic and additional government control measures would change this forecast.

He also noted that IHS Markit does FuelsMarketNews.com

2020 POST-COVID

2025 SOURCE: GUIDEHOUSE

not believe a second round of virus containment measures would have as significant an impact on demand as the first round.

EVs TAKE TEMPORARY HIT Scott Shephard with Guidehouse (formerly Navigant Research) addressed the most watched trend in the automotive sector—what will happen with the growth of the electric vehicle market?

Entering 2020, Guidehouse projected that the world would sell more than 12 million hybrid, plug-in hybrid, battery electric and fuel cell vehicles by 2025.

The pandemic puts a major question mark on that trend.

Shephard reported that Guidehouse expects EV sales to drop 16% in 2020, which is a less dramatic loss than the vehicle market as a whole, which is forecast to drop 30%. Yet, this seems

PREPARING FOR THE FUTURE The bottom line is that the number of variables that will determine how the markets emerge following the pandemic makes it impossible to accurately predict what will happen. The market insights provided by FUELS2020 speakers provide us additional context with which to evaluate the markets around to help make sense of our options going forward.

But hope is not a strategy—it takes intentional effort. Dr. Oliver Schlake of the University of Maryland said that businesses must craft “future robust strategies” in order to flex their operations to match the needs of their customers, regardless of disruption occurring around them. He noted that too often such strategic plans are predicated on a familiar and recent experience (i.e., a plan is developed to deal with another pandemic) but that this is the wrong approach. It is essential to develop “business advance teams” that are focused on long-term market outlooks, and watch for signals that could prompt strategic adjustments. By creating multiple scenarios that could materialize due to circumstances beyond your control, you can begin to create plans and craft the skills necessary to remain viable in all potential scenarios.

John Eichberger is executive director of The Fuels Institute.

For more information, visit www. fuelsinstitute.org.

FMN Magazine SUMMER 2020 | 9

FUELED FOR THOUGHT

Quality Fuel Matters

BY JOE O’BRIEN

A

ccording to the “2019 Consumer Behavior at the Pump” report from NACS, fuel customers are increasingly filling up at specific, preferred stations. While fuel price is the top driver of preferences, 47% of fuel customers reportedly choose where they purchase fuel based on their perception of the station’s fuel quality. The recent drop in demand—and plunge in prices—illustrate the importance of attracting and retaining fuel customers. Leveraging the quality of fuel is a way fuel marketers can get an edge on their competition.

DEFINING FUEL QUALITY We know that the quality of any product is one way customers measure 10 | FMN Magazine SUMMER 2020

its value. But fuel quality is probably something that most consumers take for granted—until their vehicle’s performance draws their attention.

Baseline expectations for fuel quality usually include: • It is free of water, particulates or other contaminants.

• It contains the minimum octane rating required by law.

• It doesn’t damage the vehicle or cause performance issues.

Consumers who expect a little more from their fuel might want it to: • Contribute to higher fuel economy.

• Help maintain the vehicle.

• Contribute to an environmental approach to fueling.

Detergents play a significant role in fuel quality. The spectrum of detergent levels in fuel range from lowest additive concentration (LAC) set by the U.S. Environmental Protection Agency to a level that meets the proprietary standard of the Top Tier program, to levels that exceed even that program’s standards. While LAC is better than fuels that lack detergents entirely, it is not a level recommended by many automakers. The Top Tier program, which was established by automakers and engine manufacturers in 2004, was developed to help protect engine components that are susceptible to engine deposits.

In 2016, AAA published results from a study that compared Top Tier gasoline and non-Top Tier gasoline. The findings included: • An engine running on a Top Tier gasoline averaged 19 times fewer intake valve deposits than when it wasn’t running on Top Tier gasoline.

• Long-term use of a gasoline without an enhanced additive package can lead to reductions in fuel economy of 2-4%.

• Emissions and drivability issues increased when Top Tier gasoline was not used.

FuelsMarketNews.com

• In most cases, carbon deposits can be reduced or removed from critical engine components by switching to a gasoline that meets the Top Tier standard.

• The average price difference between Top Tier and non-Top Tier brands was three cents per gallon for a 12-month period.

PHOTO©ISTOCK/KOONSIRI BOONNAK

To sell Top Tier fuel, fuel retailers pay a fee to be an approved supplier.

Gasoline marketers cannot select certain service locations under a specific brand to be Top Tier-certified.

Because of the complexity of the supply chain, diesel fuel marketers may enroll select stations in the Top Tier program.

Stations that become approved suppliers are instructed to “prominently display the Top Tier logo.”

Fuel marketers (and customers) should be aware that a higher detergency rate doesn’t necessarily equate to an effective detergency rate. According to the Top Tier program, the chemistry of the detergent is just as important. Merely adding more detergent does not necessarily make the fuel perform better. Therefore, using the approved detergency levels and approved treat rates is critical to becoming licensed to offer Top Tier fuel.

MORE CONSUMER EDUCATION Customer perceptions of the quality of their fuel, and therefore value, are likely influenced by how informed they are about fuel composition in general. For example, summer blends of gasoline are shown to have better fuel economy than winter blends.

Perceptive motorists will observe this performance boost, but how many know the actual reason for it?

According to the AAA report, 63% of motorists believe there is a difference in the quality of gasoline sold by retailers. However, only 12% of drivers purchase gasoline based upon its FuelsMarketNews.com

detergent additive package. This could be because other factors (such as price) are more compelling reasons to choose one brand’s gasoline over another. But, it could also be because many customers don’t truly understand what value they are getting from their fuel.

The fuel industry needs to do a better job educating customers about fuel composition. It is problematic that the majority of fuel customers probably don’t know what Top Tier fuel is. While requirements to display the Top Tier logo are a step in the right direction, it most likely isn’t enough to effectively engage an increasingly distracted customer base.

This is further complicated by the fact that the fuel dispenser is one of the busiest customer interfaces. Between octane blends, E15, E85, diesel options, all the variations of payment methods and, of course, advertising, customers are inundated with choices to make and things to read.

New drivers and new cars with advanced technologies hit the road every day. Do new generations of drivers know the benefits of the Top Tier program? Probably not. Fuel brands might want to consider creating an in-dispenser video to educate consumers about the detergent levels in fuel.

New drivers who were not exposed to the AAA report of 2016 are likely not even aware of the deposit build-up on intake valves as a result of running on LAC fuel. A strong marketing campaign that quickly and effectively educates customers about fuel detergents could help fuel marketers gain customer loyalty, increase their competitive advantage and position their station to better weather challenging market circumstances.

Learn more about how to become a licensed Top Tier fuel supplier at www.toptiergas.com/licensing.

Customer perceptions of the quality of their fuel, and therefore value, are likely influenced by how informed they are about fuel composition in general.

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, or visit www.sourcena.com to learn more.

FMN Magazine SUMMER 2020 | 11

RETAIL OPERATIONS

Delivering on ‘Retail Basics’ When It Matters Most Clean stores attract more customers because they convey safety and security.

BY MIKE G. ZAHAJKO

T

he battle lines in retail petroleum take to familiar trenches—retail basics—as the world implements drastic responses in the fight against COVID-19. Retail basics are safety, cleanliness and customer service.

These basic “customer experience” needs drive foot traffic and buying behavior. GasBuddy data reveal the top three factors for increased c-store customer foot traffic are outdoor lighting, cleanliness and customer service, 12 | FMN Magazine SUMMER 2020

according to its 2019 “Best of the Best Gas Station Convenience Store Brands” report. The data show that above average customer ratings in outdoor lighting, mostly connected to customers’ perceptions of safety, increase foot traffic by as much as 15.9%. Cleanliness impacts foot traffic by 13.1% and customer service by 10.8%. Increased foot traffic is directly correlated to increased sales.

Still not convinced that the retail basics are critical? In the mystery shop

process, major oil company brands like Shell, BP and Chevron devote more than 60% of the total site score to the retail basic categories. If convenience retailers are not sure that this applies to their locations, take a moment and read through the reviews that customers are writing and sharing online about their experiences at stores. Top online review themes consistently mirror the same core issues of customer service, cleanliness and safety.

Safety has always been a critical component of the customer experience—even an imperative of doing business. Consumers perceive safety as a feeling and usually get cues from their environment in areas like lighting, employee uniforms and even the improvement qualities of the facility. Since COVID, consumers now connect safety with cleanliness, merging the top two factors driving the FuelsMarketNews.com

PHOTO©ISTOCK/FG TRADE

RETAIL OPERATIONS

customer experience into the single most important customer experience issue.

The International Council of Shopping Centers recently shared the study “Expectations for Businesses Reopening After COVID-19” that identified the top safety measure that would make consumers feel more comfortable visiting a physical establishment: “more frequent cleaning and sanitizing.” In another GasBuddy survey of nearly 17,000 c-store customers, cleanliness ranked as the top factor in choosing which retailer to visit—even above fuel price! In the most recent report, cleanliness now drives foot traffic by as much as 15.7%.

Clean stores attract more customers because they convey safety and security. When public safety and security concerns are high, there is an easy way to signal “we’re open and you’re safe here”—let customers see you cleaning.

When customers drive up and actively see employees wiping down surfaces and disinfecting high-touch areas around sites, it gives them a sense of reassurance. Show customers that you care about their safety and well-being by cleaning and disinfecting your locations, without saying a single word.

Some retailers have special vests to identify them as the “cleaning crew.”

Others utilize messaging over the intercom to remind employees and customers of the cleaning schedule. More than ever, consumers are paying attention to retailer messaging regarding the strategies taken to ensure safety. In the GasBuddy survey, 80% of consumers stated that they are “somewhat” or “very aware” of retailer response action communications.

Now that it is clear what customers want, delivering on the retail basics should be the easy part. Wrong! If it FuelsMarketNews.com

was easy, just adding “cleaning” to the daily checklist would ensure a safe and positive customer experience in every store. And cleaning is likely already on most sites’ daily checklists.

Where to go from here? The retail basics require leadership support and engagement, which includes communicating priorities and expectations.

Resources must be assigned and allocated. Labor usually makes up 80% of the cost of cleaning. Another key to success is implementing a consistent cleaning program with products and training to fit retailers’ site needs.

Use order data, mystery shop scores, online reviews and internal site audits to track the program success.

Too often key priorities start in the boardroom and are not properly communicated down to the store level.

Strong leaders clearly understand the vision and help frontline employees by setting clear expectations. Once expectations are set, strong leaders provide communication to ensure understanding and properly train on the “why, how, what.” Strong leaders also hold their teams accountable.

The final tip is to start with the most visible and high impact area first—the fueling area. About half of all c-store customers never come into the store, and their entire experience is at the pumps. Maintaining a clean forecourt and being seen by customers cleaning outside is the best first impression retailers can make and shows their customers that it is safe to come inside and shop. As consumer expectations adjust post-COVID, there has never been a better opportunity to differentiate from the competition and win more business by delivering on the retail basics.

Since COVID, consumers now connect safety with cleanliness, merging the top two factors driving the customer experience into the single most important customer experience issue.

Mike G. Zahajko is the executive vice president, sales for CAF. CAF is a leader in outdoor cleaning and c-store image solutions.

For more about CAF, visit www.mycaf.com.

FMN Magazine SUMMER 2020 | 13

RETAIL OPERATIONS

The Path to Profit Six ways new car washes can fully leverage strong distributor relationships.

BY MARK TENTIS

B

usinesses are not static; each one is like a living, breathing organism that is susceptible to the forces of change. While our typical view of the world and how it operates has undergone profound change over the past few months, a shifting landscape needs to be viewed from both short- and long-term perspectives, and nimble and forward- thinking companies can identify and combat 14 | FMN Magazine SUMMER 2020

market upheavals to emerge healthier as communities begin to re-open and heavier traffic returns to the roads.

In preparing for the path to full re-opening of local businesses, new car wash operators should consider the following: • How will the local economic impact of COVID-19 affect your consumer base and their willingness to spend their disposable income?

• Are any potential disruptions in the supply chain just around the corner, or have some already occurred—and what has been or could be their ultimate effect?

• How have local distributors been affected, and will they have shipping or service delays in the months to come?

The answers to these questions will be different for every new car wash owner since each site is unique. The level and rate of change will differ depending on what part of the country, and in which part of a town, a new car wash is located.

This will ultimately help determine the best course of action. Their operators must focus more directly on the status and health of their relationship with distributors and other channel partners.

FuelsMarketNews.com

RETAIL OPERATIONS

PHOTO©ISTOCK/CASARSAGURU

And, because new washes are coming into a unique business landscape, it is also a good time to identify creative ways to bolster revenue, another area where distributors and industry connections can be of assistance.

Here are six ways that new car wash operators can fully leverage the distributor relationship to optimize their businesses: 1. Perform Due Diligence: Research the market area in which you operate. Talk to the local Chamber of Commerce, for example, to see what they can tell you about the distributors in the area, including any significant successes they’ve had or, on the flip side, any complaints lodged against them. If feasible, reach out to other operators in the area and ask about their experiences with local distributors. Some may not be willing to talk, but those that are willing can offer invaluable insight. The end game is to identify a distributor with a strong reputation who can be your best ally as you work your way through the site selection, permitting, equipment selection and installation processes.

2. A ccess Local Knowledge: This is especially true if you are operating in a new market. Distributors that know the area can provide important information regarding population demographics, travel patterns and other variables that must be considered when setting up a wash program. The distributor can also provide background on any competitors in the area and maybe FuelsMarketNews.com

even give you some tips on what has been successful or unsuccessful for them.

3. T ake Advantage of Product Expertise: The best distributors are the ones who know the systems that they sell and represent, inside and out. This knowledge can be indispensable when the operator is trying to decide, for instance, if the best car wash solution is soft-touch, touch-free or a system that combines both technologies, or the best type of entry system to deploy.

4. Define the Bottom Line: Once the car wash is installed and ready for operation, the distributor can offer advice regarding pricing based on experience with other customers in the area. The distributor can also aid in recommending any ancillary profit centers or loyalty programs that can also contribute to the bottom line.

Identify a distributor with a strong reputation who can be your best ally as you work your way through the site selection, permitting, equipment selection and installation processes.

5. L ook Down the Road: A distributor that is familiar with any changes or enhancements in equipment technology can help keep the operator’s wash offering on the cutting edge.

This can include next-generation remote-access technologies that let the operator stay in touch with the wash and be aware of its operational and maintenance patterns. This technology can allow an operator to make instant adjustments to those patterns from anywhere in the world via computer or smartphone. Better, more efficient wash technologies can FMN Magazine SUMMER 2020 | 15

RETAIL OPERATIONS

The best distributors are the ones that know the systems that they sell and represent, inside and out.

Mark Tentis is the vice president of global sales for OPW Vehicle Wash Solutions and can be reached at mark.tentis@opwvws.com.

16 | FMN Magazine SUMMER 2020

6. Plan for an Emergency: There is always a chance, especially as systems age, that an equipment breakdown will occur or some form of preventive maintenance will be required. To ensure that profitabsorbing downtime and repair or replacement costs are kept to the bare minimum, partner with a distributor that not only has a vast knowledge of the complete car wash

system but also employs a staff of expert technicians who are able to respond quickly and confidently to any equipment emergency.

The COVID-19 pandemic will leave many of us changed in ways both great and small. With that said, the foundation of a successful car wash business—whether new or existing— remains a rock-solid relationship with wash distributors. The ones who can reliably offer wash operators a complete package of services, from site and equipment selection to ancillary profit center advice and on-time maintenance service, will be the ones to rely on as we get back up to speed.

FuelsMarketNews.com

PHOTO©ISTOCK/DANIEL CHETRONI

also reduce water, soap/detergent, polish and electricity usage, leading to streamlined operating costs that will result in a healthier bottom line and a more environmentally friendly wash operation.

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IMPROVING YOUR PERFORMANCE

RETAIL OPERATIONS

Fueling Bugaboos

Meter loss, slow-pumping dispensers and down dispensers can siphon off retailer profits.

BY BRIAN REYNOLDS

T

here are some big-time money wasting bugaboos in our industry. So as the song goes from “The Sound of Music,” here are a few of my “Favorite Things ” that can be avoided or minimized.

METER LOSS Virtually all retailers give away gasoline and don’t even know it. Fuel is a product that most people never see. It is a liquid delivered via truck and unloaded via a big black hose. It’s dispensed through a smaller black hose having 18 | FMN Magazine SUMMER 2020

been converted from cubic inches to dollars and gallons. Customers can’t see how much is being dispensed and can only confirm dispensing occurred by way of a gas gauge in their vehicles that only represents percentages of full or empty without exact confirmation to numeric values associated with the sale. Yet customers can claim they were cheated without any factual basis to make that claim.

Here are the statistics to keep in mind when it comes to how metering and dispensing process works:

• Fuel is dispensed and metered in cubic inches then converted to gallons and dollars.

• There are 231 cubic inches in any one gallon of liquid.

• There are 1,155 cubic inches in any five gallons of liquid (231 cu. in. x 5 gallons = 1,155 cu. in.).

• Federal guidelines allow for meters/ totalizers to be “off” by as much as + or – six cubic inches per five gallons of product dispensed.

• As a rule of thumb, the amount of slack allowed in a meter is ½%: 6 cu. in. / 1,155 cu. in. = 0.0052 0.0052 x 100 = 0.52% or ½%.

The government guidelines are focused on accuracy for sure and allow for an acceptable margin of error that more or less accommodates the mechanical variance of “meter drift,” allowing FuelsMarketNews.com

RETAIL OPERATIONS

PHOTO©ISTOCK/MIRSAD SARAJLIC

for a reasonable tolerance (+/- six cubic inches) for temperature. That is all well and good, but in today’s economy any variance much greater than zero has a significant financial penalty.

One cubic inch equals 0.004329 gallons. At $2 per gallon, a one cubic inch loss would mean that a 150,000-gallon per month gas station would suffer a $649 per month loss—that is just at one cubic inch of loss.

All meters are built to purposely vary to “greater than zero” for the customer’s benefit. The term “meter drift” sounds like it goes up and down repeatedly, but that’s not the case. There are meters, such as the Wayne Xflo, that are precisely engineered, milled and assembled that provide a tolerance level closer to zero margin of error, as well as monitoring solutions that will issue an alert to test and possibly recalibrate the meter.

SLOW-PUMPING DISPENSERS There can be many variables that influence how fast a dispenser is flowing. It could be the pump or a nozzle issue. Most likely it is the filter. The problem with a slow flow dispenser is that it really irritates customers. A customer is very likely to hold a grudge against not only the dispenser but also the entire store and might not ever come back.

Historically, passing the information to the correct person for remedying a slow flow dispenser falls on the shoulders of a store clerk. Usually, by the time a store clerk is aware of a problem, it is too late. Who knows how many customers had a bad experience before someone complained, and who knows if any of them will be back?

Flow rates can be monitored and even forecasted weeks in advance to FuelsMarketNews.com

determine the most cost-efficient time for filter changes. There also is no rule that says change all the filters at once at the same location. Monitoring solutions may suggest that for dispensers that are not used as often, there may still be several months of useful time left on an individual filter.

DOWN DISPENSERS The biggest bugaboo of all is when a dispenser goes down. Machines do fail—it is inevitable. However, this seems to be one of the most difficult pieces of information to acquire for the person who can fix the problem.

How often do customers see an out-of-order cover on a nozzle or, even worse, a giant trash sack covering up the entire dispenser? In today’s world, a gas lane also represents a parking spot. Many customers pump gas then go inside the store. Customers generally don’t park in an out-of-order stall.

A busy c-store only has so many spots close to the front door, but customers who don’t need gas won’t park where there is an out-of-order sign—even if that is the only spot on the lot and it is in the shade. So, bye-bye customer.

Believe it or not, there are monitoring solutions available that will indicate a dispenser is down.

Technology is advanced to the point that many of the things that historically were passed off as the “cost of doing business” can today be monitored and remedied before it becomes a costly proposition.

A retailer’s favorite thing is making money. But making money and making a profit can be two different things. Doing things just slightly different can often mean the difference between profit and loss.

The biggest bugaboo of all is when a dispenser goes down.

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.

FMN Magazine SUMMER 2020 | 19

COMMERCIAL FUELS

A Year in Review Key findings from this year’s Best Fleets to Drive For program.

BY MARK MURRELL

A

fter 12 years of evaluating participants in the Best Fleets to Drive For program, CarriersEdge has documented many industry changes. And, the organization has learned that the best fleets in the industry continue to innovate—regardless of market conditions—and these fleets are always looking to improve company culture and improve efficiency. That held true again in 2019.

20 | FMN Magazine SUMMER 2020

THE SHIPPER-DRIVER EXPERIENCE Drivers don’t have the patience for shipper delays, nor should they. It costs them money. Since the standardization of ELDs, the need for drivers to maximize their hours of service is more important than ever. The best fleets understand all this, and we’ve seen a number of them work with their drivers, creating innovative ways to minimize shipper delays. Or, if they are delayed, compensation is increasing

and coming sooner. Recently, we have observed the best fleets use mobile apps to enhance transparency between the shipper, driver and fleet.

Many of the apps are designed so that drivers can rate the pickup and delivery experience. This makes it easy for drivers to provide honest feedback about their negative or positive experiences with specific shippers. It’s especially important during this pandemic when facility access may change from day to day.

GUARANTEED PAY As expected, we saw fleets continue to adopt guaranteed pay programs.

Nearly every top 20 fleet offered a full guaranteed pay structure to drivers FuelsMarketNews.com

PHOTO©ISTOCK/PIXELCI

COMMERCIAL FUELS

this past year. As we see more fleets transition to offering base salaries, it may not be long before this becomes the standard form of pay in the industry. The stability of knowing how much is in a paycheck, combined with the benefits we’re seeing some fleets offer when drivers exceed goals, is becoming increasingly desired by drivers.

supplement or replace their traditional driver meetings, and we’ve noticed some fleets regularly reach 100% of their drivers through these channels.

Podcasts grew in popularity among fleets as another way to communicate with drivers. We’ve seen fleets use this tool as a way to share company information and driver success stories.

MAXIMIZING UPTIME On the surface, servicing a truck during a driver’s “home time” seems simple, but when you factor in that even drivers employed by the top 20 best fleets average only 34-48 consecutive hours of home time a week, it’s not so easy. Scheduling can be a challenge. Nonetheless, even in the short time frame, we’ve found that nearly all of the top 20 best fleets have programs in place to perform preventative maintenance during that window to keep drivers on the road while reducing equipment-related downtime. It makes a difference in maximizing productivity, and more fleets will likely make this a core requirement in coming years.

ENVIRONMENTAL PRACTICES This year’s report shows that the top 20 fleets significantly improved their environmental practices—something unexpected. For a number of years, fleets have upgraded to more fuelefficient equipment and integrated systems to improve aerodynamics to reduce their trucks’ carbon emissions.

But that was typically the extent of their environmental-based decisions.

In 2019, more fleets took a more holistic approach to their environmental programs by improving sustainable practices at their facilities, in addition to adding fuel-efficient equipment.

DEVELOPMENT AND CAREER GROWTH In an industry that has long held onto its traditional ways of managing operations, we’ve seen many fleets in recent years use technology to their advantage. Every top 20 best fleet this year used social media to some degree.

Social media eliminates the many headaches that come with delivering important company messages while drivers are on the road. CarriersEdge research showed that 60% of the top 20 best fleets used social media tools to FuelsMarketNews.com

FUTURE OUTLOOK COVID-19 wasn’t a concern in 2019 when the Best Fleets to Drive For program wrapped up. Now, with COVID-19 sweeping the entire globe, fleets are tasked with finding solutions to the many operational challenges the virus poses. Fleets that have never dealt with the impacts from a natural disaster are adjusting on the go. It’s too early to tell how this may shape the industry long-term, but next year’s Best Fleets to Drive For program should provide insight on how the best fleets adjusted to such unprecedented circumstances.

Nearly every top 20 fleet offered a full guaranteed pay structure to drivers this past year.

Mark Murrell is co-founder of CarriersEdge, a leading provider of online driver training for the trucking industry, and co-creator of Best Fleets to Drive For, an annual evaluation of the best workplaces in the North American trucking industry, produced in partnership with the Truckload Carriers Association. He can be reached at www.carriersedge.com.

FMN Magazine SUMMER 2020 | 21

COMMERCIAL FUELS

Modernizing the Nation’s Truck Fleet Suspending the FET to get more new trucks on the road is the path to a green recovery.

BY ALLEN SCHAEFFER

A

s policymakers debate future economic stimulus packages as part of a COVID-19 recovery plan, suspending the federal excise tax (FET) through 2021 for new heavy-duty commercial 22 | FMN Magazine SUMMER 2020

truck purchases will deliver immediate results, restore and expand domestic manufacturing jobs, increase productivity of truckers and reduce emissions for communities everywhere.

Since the crisis began, the nation has witnessed firsthand the vital role of the nation’s trucking industry— the men, women and trucks on the road working to restock grocery store shelves and deliver essential medical supplies and personal protective equipment. Elected officials now have an extraordinary opportunity to give this industry a badly needed boost by suspending the FET through 2021. The FET layers on an average of $22,000 to the cost of a single new class-8 big rig, driving the price tag out of reach for many fleets and truckers that typically operate on razor thin profit margins and that FuelsMarketNews.com

PHOTO©ISTOCK/VENCAVOLRAB

COMMERCIAL FUELS

don’t always have easy access to credit or financing.

The opportunity to modernize the truck fleet is significant. Truck sales in the United States are now predicted to decline by 50% in 2020. According to the latest DTF analysis of data from IHS Markit, more than half of all class 8 trucks on the road today are over 10 years old, which will push the fleet age even higher. Diesel engines are the workhorse of the trucking industry and power more than 95% of the largest tractor trailer trucks. Truckers with these older model vehicles are missing out on an entire generation of improvements in fuel efficiency and now near zero emissions technology— not to mention a vast number of safety enhancements.

Suspending the FET to get more new trucks on the road is a reasonable and rational part of any recovery plan, especially any green recovery plan that hopes to deliver real economic and environmental benefits in the near term. With plenty of ideas circulating, policymakers need to balance aiding today’s recovery as well as seeding tomorrow’s future.

Technologies available today can start working today and deliver benefits today, but must be weighed against approaches and technologies that are more aspirational and long-term and may not be commercially available.

Unlike cars, commercial vehicles are capital investments with longer useful lives. It is not uncommon for trucks to be in service more than 20 years powered by engines that have seen more than a million miles and have been rebuilt many times over. Yet while FuelsMarketNews.com

trucks are prided for their durability and longevity, they may not be using the latest efficient and clean generation technology. The most recent nearzero emissions tailpipe standards for commercial trucks were implemented a decade ago.

Thanks to the newest generation of clean diesel technology, a new truck replacement today can eliminate more than 250 lbs. of fine particle emissions and almost 10 tons of greenhouse gas emissions. Compound these benefits over the share of trucks on the road not using current technology, and the benefits are substantial. Consider this: Half of the fleet using the latest generation clean technology has eliminated one million tons of fine particle emissions, or the equivalent to taking all cars off U.S. roads for 33 years.

Cleaner fuel and engines utilizing advanced technologies have combined to reduce nitrogen oxide emissions by 97% and particulate matter emissions by 98%. Since 2010, more fuel-efficient diesel trucks have saved 101 million barrels of crude oil and reduced CO2 emissions by 43 million tons.

The time is right to encourage truckers to invest in technologies that are commercially available now, that can start working immediately, and deliver economic and environmental benefits today. Boosting truck sales by temporarily suspending the federal excise tax on truck purchases is a great way to spark demand for U.S. truck production, boost employment and sustain truck dealers that support local communities while generating significant and lasting clean air and climate benefits.

A new truck replacement today can eliminate more than 250 lbs. of fine particle emissions and almost 10 tons of greenhouse gas emissions.

Allen Schaeffer is the executive director of the Diesel Technology Forum (DTF), a not-for-profit organization dedicated to raising awareness about the importance of diesel engines, fuel and technology. Forum members are leaders in advanced engines, vehicles and equipment, cleaner diesel and renewable biofuels and emissionscontrol systems. For information visit www.dieselforum.org.

FMN Magazine SUMMER 2020 | 23

COMMERCIAL FUELS

A Fluid Situation Exploring DEF supply and market ramifications during the pandemic with Integer Research.

BY KEITH REID

S

elective catalytic reduction (SCR) technology that relies on diesel exhaust fluid (DEF) is a critical product for modern clean diesel engines.

In fact, without DEF these engines are programmed to either drop into low-performance mode or are locked out of being able to start. That makes DEF just as critical as diesel for keeping the trucks on the road.

With the COVID-19 pandemic’s wide-ranging impact on numerous products and supply chains, now is a 24 | FMN Magazine SUMMER 2020

good time to look at how the pandemic is impacting DEF. Tim Cheyne, vice president, AdBlue/ DEF & emissions control at Integer Research, and Fabricio Cardoso, Integer’s manager, DEF/emissions control, spoke with FMN about the current and anticipated future state of the DEF market.

What is the current state of the DEF market, and how is that being impacted by COVID-19?

Cardoso: The market is now getting close to a billion gallons a year in

North America (U.S. plus Canada) and is still growing, despite the current coronavirus measures. It was in the low 900 million gallons in 2019, and we had originally expected it to be 1.05 billion gallons in 2020, but our numbers now are 980–990 million gallons.

The market grows at a much faster pace than the diesel market, because the population of diesel trucks with SCR technology is growing over time.

So, if the total mileage in a year happens to be the same as the mileage in a previous year, you would see diesel consumption declining because as the fleet turns over, the newer trucks are becoming more fuel efficient. But these newer trucks are consuming DEF and use SCR technology, which helps make trucks more efficient.

What is happening with coronavirus is that trucks are driving less, and they are consuming less diesel, and if they FuelsMarketNews.com

PHOTO©ISTOCK/1933BKK

COMMERCIAL FUELS

drive less, they also consume less DEF. So that is why it is still a growing market, but instead of growing 13% this year, it is growing 5%.

and distribution—distribution facilities, terminals, etc. This has been mostly unaffected from the feedback we have received.

With the DEF linkage to fleet turnover, how is the purchasing cycle being impacted by the pandemic?

Cardoso: Truck sales are dropping in 2020, and they were going to be low this year anyway because they were much higher than expected in 2019.

We had already expected truck sales to drop by almost 30% this year. But now you have low economic activity— dealerships are shutting down, truck manufacturer servicing plants are down, and you have a declining supply as well. Now, we expect the sales to be a little more than 50% for 2020. That further impacts DEF consumption and for years down the road.

How are the DEF margins in general today? There have long been challenges related to truck traffic densities.

Cheyne: DEF profitability is mostly connected to high-volume diesel fuel locations. In almost every case, a reasonable-size truck stop has DEF at every pump and every fueling island.

That has been led by big investments in past years by the major operators. And they have also invested in their own production and distribution, in some cases.

For the larger players, the margins are good, with a reasonable return on investment. Even smaller and independent operators do well if they have the diesel volume and have enough throughput that they probably already have DEF at the dispensers. When you get to smaller filling stations and locations in city centers and rural locations, the argument for the full installation of underground tanks would be much more difficult. In those cases, you would often have jugs as the main solution. There is also a large segment of pickup trucks and other small vehicles using DEF, and there is a very profitable packaged product business with jugs.

What is the market comparison with the United States and Europe?

Cardoso: A good proxy to DEF consumption [with the differences noted previously] is diesel consumption. If there is less diesel being consumed, trucks are driving less and consuming less DEF. The U.S. has a longer list of essential businesses so the loss in diesel consumption is [less steep] than you see in Europe. It dropped by 15-20% in the U.S. and is heading back toward normal. In Europe [in April], the drop in diesel was closer to 50% in some countries and gasoline closer to 80%.

Is the pandemic creating any supply chain disruptions?

Cardoso: We have not heard of any disruptions in terms of production FuelsMarketNews.com

The DEF market is getting close to a billion gallons a year in North America (U.S. plus Canada) and still growing, despite current coronavirus measures.

How are totes being deployed today?

Cheyne: Totes are still in use but are not as critical as they used to be.

There are companies that provide tote refill as part of their business and who have customers that have sites at their own facilities. But FMN Magazine SUMMER 2020 | 25

COMMERCIAL FUELS

The clean diesel folk, such as those at the Diesel Technology Forum, are very bullish on the technology.

In fact, these new diesels are very clean. However, there is also a push for electrification in all vehicle segments. What impact do you see from these developments?

Cardoso: There is more and more talk about electrifying the truck fleets. We take that into account, but generally we see smaller trucks making that shift. It is difficult to see that so much with Class 8, long-haul trucks. We still see diesel as the primary powertrain for those vehicles.

California is pushing very ambitious targets on new, heavy duty [electric] truck sales. Of course, if that goes through it can have an impact on DEF consumption not just in California but any other states or countries that might follow the same approach. But that is a longer-term issue.

ARB’s initial NOx requirements seemed to work against SCR technology.

Cheyne: So far, the discussion has been quite pragmatic about how far we can push NOx before there is a big fuel efficiency impact. California was pushing for an ultra-low NOx limit [from 0.2 gram per brake horsepowerhour to between 0.015 and 0.035 gram per brake horsepower-hour]. That would have required extra technology, like waste heat recovery and other novel approaches, which would have been difficult to implement and would likely hit durability.

But now that EPA is involved, truck makers are bridging the gap between EPA and CARB. The concession will likely be 0.1 or 0.08, which is achievable with current technology. And it is also more reliable because it is just extending existing technologies, which is always safer than putting in something new. That will likely mean mostly SCR and DEF, so we think it will probably be a net gain for DEF consumption.

Even after that regulation, there’s talk about things like double [DEF] dosing systems, which we have seen in passenger cars in Europe. That is taking advantage of the mileage properties with SCR and using DEF as a way of reducing fuel consumption. We expect that we will probably see a continuation of the trend toward increasing DEF consumption per mile.

When the Phase II requirements for truck fuel efficiency and emission reductions were being discussed, there was great uncertainty over what role DEF would play in the solution. California’s

Integer Research was founded in 2003 as a specialist provider of research, data, analysis and consultancy services across the fertilizer, DEF/AdBlue, and wire and cable markets. The company was acquired

by Argus Media in 2018.

many of these companies encourage customers to switch over to more permanent bulk storage, even if it’s quite limited—the capacity of two to four totes. They use that to lock in customers with service contracts and deals on equipment.

[Automotive] dealerships have traditionally been a major market for totes, but as DEF becomes more available, you see fewer drivers going to the dealers to refill.

Fabricio Cardoso is manager, DEF/emissions control at Integer Research. He can be reached at fabricio.cardoso@argusmedia.com.

Tim Cheyne is vice president, AdBlue/ DEF & emissions control at Integer Research. He can be reached at tim.cheyne@argusmedia.com.

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

26 | FMN Magazine SUMMER 2020

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DEFINING | WHAT’S NEXT

FUEL MARKETERS

Good Business How to optimize the fuel logistics puzzle.

BY SID GAITONDE

F

uel logistics is a global discussion, and many factors play into its success. Because of COVID-19’s stay-at-home policies in the first half of 2020, many analysts warn that global petrol demand is set to drop significantly in some key markets as western economies had practically come to a halt in response to the pandemic.

28 | FMN Magazine SUMMER 2020

For many businesses supporting the fuel supply chain, the outlook is troubling.

Fuel logistics can be complicated.

When you add a global pandemic on top of an already complicated industry, every action you take matters. Are you buying wholesale fuel at the optimal price? What about driver behavior such as speeding, hard braking, fast

acceleration and adhering to a route provided by the dispatch office? What if drivers or dispatchers are out sick?

Are you getting the most out of your fleet? All these issues can affect your operations, fuel and truck maintenance costs and safety. Ultimately, they can create inefficiency, waste money and impact the bottom line.

During this global health crisis, organizations, carriers and trucking companies must be very cost conscious.

How can those involved in the industry lower costs and reach operational efficiency while maintaining a positive customer experience?

FuelsMarketNews.com

PHOTO©ISTOCK/WENDELLANDCAROLYN

FUEL MARKETERS

When we look at how to optimize fuel logistics, there are a few things we can consider.

Route and trip optimization: In addition to helping find the best way to get from point A to B to C to D, route optimization also helps you determine the order of the stops. The best route is not necessarily the shortest, but the shortest possible that avoids congestion and traffic or contributes to less truck idling times. When utilizing route and trip optimization, fleets also want to make sure delivery sites are as close to each other as possible. This allows truckers to fit more deliveries into one shift. Getting more out of each dispatcher as well as each driver and vehicle really matters.

Asset utilization: Not only do companies want to optimize truck routes, they also want to make sure each truck is carrying the biggest possible load—also called high payload usage—in addition to keeping the trucks’ axles and pin weights within legal constraints. Speaking of legal constraints, it’s also crucial to decide who gets their fuel first and why. A thoughtful compartment allocation makes sure your vehicles’ loads stay well-balanced from the first to last delivery point. Sounds complicated?

A comprehensive logistics software can usually help dispatchers solve this riddle quickly and reliably.

Avoid runouts: Retains and runouts can often become a nightmare for both the logistics companies and their customers. Fuel stations, industrial sites and logistics companies want to avoid these situations. This is especially important for companies FuelsMarketNews.com

responsible for replenishing the stock (also known as vendor-managed inventory). With VMI, there are service level agreements that the company has to meet, including not allowing any sites to “go dry.” For fuel retailers, a dry pump results in a poor customer experience. Drivers who encounter runout situations while seeking to refuel will likely think twice before returning to the same location.

Prevent retains: Fuel is usually taxed the moment it leaves the terminal. Having a taxed product that can’t be sold increases a company’s costs. It can further cause delivery problems if a fuel compartment that was supposed to be offloaded can no longer be emptied, making it difficult for a driver to proceed with the rest of a trip. This would require a dispatcher and driver to change the delivery plans on the spot. The best-case scenario is that an organization can find a nearby site that could take a delivery and then move on with the rest as planned. Of course, the worst-case scenario would be that the truck needs to return to the base or terminal to unload. All this costs time and money.

A good logistics software can help predict demand and propose what quantities of each type of fuel should be delivered to each station, ensure that tanks don’t run out of fuel, make sure there’s product in each tank and maintain balance between products with high and low sales volume.

Some day we will have a new normal, but these tactics for optimizing a sound transformation and logistics organization should remain in place.

It’s just good business.

The best route is the shortest possible that avoids congestion and traffic or contributes to less truck idling times.

Sid Gaitonde leads the product team and oversees strategic direction for PDI’s logistics solution portfolio. He can be reached at sgaitonde@pdisoftware.com.

FMN Magazine SUMMER 2020 | 29

FUEL MARKETERS

Sales in the Time of COVID Ten ways to approach selling that will catapult you past your competition.

BY JOHN KIMMEL

J

. Paul Getty was right when he said, “In times of rapid change, experience could be your worst enemy.”

We do what we do, day after day, because we have learned what works and have made it part of our daily routine. But in March 2020, our sales world changed. COVID-19 created a new business environment where what we have always done no longer worked and was often not even possible.

The days of face-to-face meetings with customers have ended, and we 30 | FMN Magazine SUMMER 2020

are faced with a choice. We can either sit at home watching TV and wait for business to return to the way it was, or we can firmly plant our feet and conquer the brave new world of selling in a post-COVID-19 reality. With that in mind, here are 10 new ways to approach selling that will push you past your competition.

1. Have a reason for your contact.

Stopping by your customers’ locations and telling them, “I just stopped by to see if you needed

anything” was never an effective strategy, and now it could be considered offensive. Your customers are struggling, so be respectful of their time and have a legitimate reason for your contact. Your customers will want to hear about the new oil you carry and the pricing specials and service changes you are making to improve your business, but they do not want to be contacted for no reason. Set yourself apart as the rep who always calls with relevant news, and your calls will get returned.

2. S tay in front of your prospects and customers. The odds are that you cannot afford a huge advertising campaign, but you can absolutely be all over social media. Before you tell me that your customers don’t use social FuelsMarketNews.com

FUEL MARKETERS

PHOTO©ISTOCK/CENTRALITALLIANCE

media, consider this: 84% of adult Americans with internet access use social media. What’s more, 97% of Americans that have made at least one online purchase are using social media. Your prospects and customers use it, too. The bad news is that 90% of all U.S. businesses now have a social media presence, which means your competitors are already on social media. The good news is that most of them, especially in the petroleum space, aren’t social media experts, and you can easily learn to do it in a more powerful and effective way.

3. R emember the 3 Cs of selling with power: Be clear, concise and convincing. Now, more than ever, you need to be able to read your prospect and communicate in the most expedient manner possible.

To do that, be clear in your purpose when you reach your clients, and make sure you know exactly what you intend to say before the contact is initiated. Next, be concise.

Present your purpose and ask great questions to move the sales process along. While many people are comfortable with a 30-minute faceto-face chat, very few people want to sit on a video conference call for half an hour before you get to your point.

Lastly, be convincing. If you are not convinced that your call could have a real impact on their business, then don’t bother—you are probably wasting their time and yours.

4. L earn to video conference.

Video conferencing is safe for everyone, and safety is a very big FuelsMarketNews.com

deal today. It is also far more effective than texting, email or even the phone because you can see the body language of your prospect, and they can see yours. This allows you to use all your skills to persuade. But if you are going to video conference, you need to do it well.

Look at the camera. Use the screen share feature. Use backgrounds and handouts. Understand the controls before you have a customer online.

There is nothing worse than sitting through a badly executed video conference call.

5. W hen it comes to safety, mimic your customer. If you and your customer are comfortable with the standard six-foot social distancing rules, then go with that. On the other hand, if your customer prefers to wear a mask and gloves you need to do the same. Always level up to your customer’s desire for safety, as it shows that you respect and care for their well-being.

Videoconferencing is more effective than texting, email or even the phone because you can see the body language of your prospect, and they can see yours.

6. Offer safety items when your customers come to you. If a prospect or customer comes to one of your locations to meet with you or pick something up, be prepared to offer gloves, masks, hand sanitizer and anything else that might be appropriate.

7. Selling is an art, so make it colorful. Your prospects are bombarded with information all day, every day.

If you want to stand out, you need to be different. Let’s say your prospect’s employees are all working from home, but you don’t think a video conference call would do your new product the FMN Magazine SUMMER 2020 | 31

FUEL MARKETERS

justice it deserves. You could invite them to all meet in their company parking lot, let them stay in their cars and do the presentation from the back of your truck. Order a meal from a source they trust. Offer to do something unique and watch how it changes your prospects’ willingness to engage.

8. Be better than you were before COVID-19—the status quo will not cut it. While your competitors’ service and quality are decreasing, yours must improve. There has never been a better time to gain market share or wallet share.

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.

32 | FMN Magazine SUMMER 2020

9. Use all forms of communication.

Most salespeople become comfortable and limit themselves. For example, some never use email, while some use nothing but email.

In this new environment you need to use them all. Any method of communicating that your customer uses is useful, including video conferencing, phone, text, email,

Linkedin, Facebook, Twitter—you name it. You can even visit them face-to-face if they want that and you are comfortable.

10. Take advantage of any downtime to learn something new.

My first recommendation would be to master the DiSC theory and process. It focuses on the understanding of human behavior and personality types. Imagine if you could predict, with amazing accuracy, how your customer would respond before you even asked a question. It is one of the most powerful skills you can master in the world of sales and will have a massive impact on your career.

Just because we are in the midst of a crisis, it doesn’t mean you have to be a passive participant. If you implement these 10 simple strategies into your everyday sales activities, your sales will increase, your commission will increase and your company and your customers will be glad that you did.

FuelsMarketNews.com

PHOTO©ISTOCK/CENTRALITALLIANCE

Be better than you were before COVID-19— the status quo will not cut it. While your competitors’ service and quality are decreasing, yours must improve.

HOW COMPATIBLE IS YOUR INFRASTRUCTURE WITH FREE MONEY?

E15 & FLEX FUELS — IF YOU’RE THINKING ABOUT THEM, THINK FAST. The U.S. government just uncorked a program to help pick up the tab for biofuel infrastructure.

It’s this simple: if you want to step up, stand out, and grow profits with E15 and flex fuels, there’s free money to help get you there.

But you’ve only got until August to apply.

A lot of retailers can sell E15 with only minor updates to existing equipment. If your site requires more, or you want to of fer E85, or you’re building a new store, this grant money could turbo your business into to a brand-new lane.

USDA’s “Higher Blends Infrastructure Incentive Program”makes $100 million dollars available to fuel retailers — paying up to 50% of the cost of upgrades and new equipment, with 40% of funds tagged for single-store owners and small chains.

You can do it. But you need to star t now. So hurr y.

Applications end August 13, 2020.

For the specifics and help applying, head to flexfuelfor ward.com

GO YOUR OWN ROAD.

FlexFuelFor ward.com

34 | FMN Magazine SUMMER 2020

FuelsMarketNews.com

COVID-19:

FUEL DEMAND and

JOB DESTRUCTION Don’t expect a serious price rally until demand picks up and overflowing inventories begin to shrink.

By Dr. Nancy Yamaguchi

O

ur world has experienced several oil shocks, but the shock caused by the coronavirus outbreak in early 2020 has been unlike any other in scale, speed, impact and response. In the absence of vaccines and proven disease treatments, social distancing and stayat-home orders are the main weapons available to fight COVID-19. On March 19, 2020, California became the first state to launch mandatory shelter-in-place orders.

By the end of March, 36 other states had joined California. Five additional states followed during the first week of April. Discretionary travel largely vanished. Large events such as concerts and sports competitions were canceled. Students stayed home and took classes online. Restaurants, bars and most retail outlets were closed. Fuel demand collapsed, as did fuel prices.

In early summer there were signs that the U.S. was succeeding in “flattening the curve,” that is, decreasing and delaying the epidemic peak to slow the infection rate and prevent health-care services from being overwhelmed. The U.S. economy had begun a phased re-opening, but a worrisome spike in new cases risked putting progress on hold. This article

FuelsMarketNews.com

focuses on how the COVID-19 pandemic has affected fuel demand and employment.

COVID-19 CAUSES A FUEL DEMAND COLLAPSE Measuring fuel consumption is imprecise, but the timeliest data available to the public is the official data published by the U.S. Energy Information Administration (EIA). The EIA publishes weekly “product supplied” data, which is the proxy for demand because it measures the disappearance of fuel from primary sources. Unless otherwise noted, the time series charts presented here focus on the 11 weeks between March 13 and May 22, 2020.

The EIA data extend back to November 1990. At that time, total U.S. oil product demand amounted to approximately 16.6 million barrels per day (mmbpd.)

The Great Recession of 2008–09 caused a dramatic contraction of demand. Between 2013 and 2019, demand began to grow again. The COVID-19 pandemic caused the fastest, sharpest drop in demand since the EIA started reporting the data. Indeed, demand in the first three weeks of April 2020 was the lowest in the data series. The next-lowest demand levels recorded were back in 1992.

FMN Magazine SUMMER 2020 | 35

COVID-19 IMPACT ON GASOLINE DEMAND Figure 1 on the next page presents EIA data on gasoline demand in 2018, 2019 and 2020 (January to May). The data show seasonality in demand, with demand rising in spring and summer and trailing down in autumn and winter. In 2018 and 2019,

week ended May 22. According to this data measurement, gasoline demand has recovered to 77% of what might be expected for this time of the year.

Gasoline demand has recovered to 77% of what might be expected for this time of the year. spring and summer demand typically was in the 9.29.9 mmbpd range, while autumn and winter demand ebbed to the 8.6-9.1 mmbpd range. In early 2020, gasoline demand appeared to be heading up for a strong driving season, reaching nearly 9.7 mmbpd by mid-March. During the second half of March, however, 37 states launched stay-at-home orders, followed by five more states the first week of April.

Gasoline use plunged to 5.065 mmbpd during the week ended April 3. During the same week in 2019, demand had averaged 9.806 mmbpd, nearly twice as much. Demand recovered to 7.253 mmbpd by the

FIGURE 1 | Gasoline Supplied, Weekly ‘ooo Barrels per Day, (January 2018-May 2020)

5,000

4,398

4,500

3,668

4,000

8,000

3,500

7,253

7,000

3,000

6,000

2,500 2,000

5,065

1,500

Jan Jan Feb Feb Mar Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec Gasoline Demand 2018

Gasoline Demand 2019

Gasoline Demand 2020

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION

36 | FMN Magazine SUMMER 2020

3,266

Jan Jan Feb Feb Mar Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec

5,000

2,757

Diesel Demand 2018

Diesel Demand 2019

Diesel Demand 2020

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION

FuelsMarketNews.com

PHOTO©SHUTTERSTOCK/ARSA35

9,696

9,000

4,000

FIGURE 2 | Diesel Supplied, Weekly ‘ooo Barrels per Day, (January 2018-May 2020) 5,500

11,000 10,000

COVID-19 IMPACT ON DIESEL DEMAND Figure 2 below presents EIA data on diesel demand in 2018, 2019 and 2020 (January to May). In 2018, demand averaged 4.146 mmbpd over the year. Demand declined to 4.082 mmbpd in 2019. The weekly data show demand ranging from approximately 3.2 mmbpd to 4.7 mmbpd.

In early 2020, diesel demand started the year lower than in prior years, in part because the winter of 2019–20 was one of the warmest on record. Diesel supplied hovered around 4.0 mmbpd during the first quarter.

Diesel use fell to a low point of 3.164 mmbpd during the week ended April 24. This was approximately 75% of the demand seen during the same week in 2019 (4.215 mmbpd). Diesel demand has moved up and down since then, recovering to nearly 3.7 mmbpd during the week ended May 15, before subsiding again below 3.3 mmbpd during the week ended May 22.

According to this data measurement, diesel demand has recovered to 76% of what might be expected for this time of the year. COVID-19 has had a mixed impact on diesel demand, because while passenger travel in diesel-powered automobiles has fallen, the demand for freight transport has risen in many areas.

This includes transport of medical supplies and rapid response to supply chain problems.

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FIGURE 3 | Jet Fuel Supplied, Weekly ‘ooo Barrels per Day, (January 2018-May 2020) 2,500 1,735

2,000 1,500 1,000

800

860

500 463

Jan Jan Feb Feb Mar Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec

0

352

Jet Fuel Demand 2018

Jet Fuel Demand 2019

Jet Fuel Demand 2020

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION

COVID-19 IMPACT ON JET FUEL DEMAND While the COVID-19 pandemic is having a dramatic impact on gasoline and diesel demand, the impact on jet fuel demand has been staggering. According to industry group Airlines for America, after seeing passenger volumes grow at approximately 5% in January to February 2020, air travel fell 89% in the week ended May 24. On March 26, Hawaii launched a mandatory 14-day quarantine period for passengers arriving from out of state. Travel to Hawaii fell to 97% year over year.

Figure 3 presents EIA data on jet fuel demand in 2018, 2019 and 2020 (January to May). Demand

COVID-19 has had a mixed impact on diesel demand, because while passenger travel in diesel-powered automobiles has fallen, the demand for freight transport has risen in many areas.

38 | FMN Magazine SUMMER 2020

averaged 1.707 mmbpd in 2018 and 1.74 mmbpd in 2019. In January and February 2020, jet fuel demand was on par with historic demand. By March, demand began to decline, and by April it had collapsed. At its low point in April, during the week ended April 10, jet fuel demand dropped to 0.463 mmbpd, just 28% of its level during the same week last year. Jet fuel demand is not clearly rebounding. It hit an even lower point of 0.352 mmbpd during the week ended May 8. This was a mere 20% of the demand level of 1.766 mmbpd seen during the same week one year before.

COVID-19 CAUSES JOB DESTRUCTION How quickly will fuel demand recover? Will it recover to its prior levels, or will the economy be changed forever?

Will the low prices cause an uptick in demand, followed perhaps next year by a price spike because of lack of investment in energy? Will this be followed cyclically by another crash? These questions are critical to both buyers and sellers in the fuel market. But we remain in the midst of the event, and we cannot see the end. As to how the country will recover, the range of opinion is so wide that there is no accepted answer. One of the critical factors to watch, however, is unemployment. If jobs do not return, the economy cannot thrive.

The pandemic has caused massive destruction of jobs. Figure 4 presents the monthly unemployment rate in the U.S. between 2000 and April 2020, as reported by the U.S. Bureau of Labor Statistics (BLS).

At the height of the Great Recession, unemployment peaked at 10%. Coming out of this crisis, the U.S. began the longest period of economic expansion in history. As Figure 4 shows, the unemployment rate fell steadily until it hit lows of 3.5%-3.6% in 2019.

These were the lowest rates of unemployment seen since 1969, five decades ago. The COVID-19 pandemic caused unemployment to skyrocket from 3.5% in February 2020 to 14.7% in April, before retreating to 13.3% in May. Figure 5 presents data from the U.S. Department of Labor showing how the COVID-19 crisis forced millions of people to file for unemployment benefits in just a few short weeks. The number of people filing initial jobless claims averaged 0.21 million per week in January and February. During the week of March 21, this number jumped to 3.31 million. At that time, five major states (California, Connecticut, Illinois, New Jersey and New York) had issued stay-at-home orders. By the next week, FuelsMarketNews.com

FIGURE 4 | U.S. Unemployment Rate, Seasonally Adjusted 16% April 2020

14%

14.7 13.3

12% At height of Great Recession, unemployment

10%

10.0

8% 6% 4% 2%

2000 2000 2001 2001 2002 2002 2003 2004 2004 2005 2005 2006 2007 2007 2008 2008 2009 2009 2010 2011 2011 2012 2012 2013 2014 2014 2015 2015 2015 2016 2016 2017 2018 2018 2019 2019

0%

SOURCE: U.S. BUREAU OF LABOR STATISTICS

the number of initial jobless claims leapt to 6.87 million. At that point, 29 of the 50 states had launched stay-at-home orders. Within the next week, 42 states had instituted stay-at-home orders. The number of initial jobless claims was 6.62 million during the week ended April 4. For the next seven weeks, the number of claims declined steadily. However, initial jobless claims remained in the millions. Over the 10-week period, a shocking total of 43.2 million people filed initial jobless claims.

CONCLUSION: AN UNCLEAR PATH The COVID-19 pandemic caused a severe oil market collapse. There are no proven effective treatments or vaccines for the disease. Economic activity was stifled as most of the population relied upon social distancing and shelter-in-place strategies. As this article is being written, the disease continues to spread and take lives around the globe.

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Horz.indd 1 40FMN_Half | FMN Magazine SUMMER 2020

7/2/2020 3:43:07 PM FuelsMarketNews.com

FIGURE 5 | U.S. Initial Jobless Claims per Week, Millions (2020)

Half Horz.indd 1 FuelsMarketNews.com

6.87

7.00

6.62

6.00

5.24

5.00

4.44 3.87

4.00

3.31

3.18 2.69

3.00

2.45 2.12

2.00

1.88

23

30

5/

5/

9

16 5/

2

5/

25

5/

4/

11

18

4/

4

4/

4/

21

28

3/

3/

7

14

3/

3/

21

29

2/

15

2/

2/

1

8 2/

5

2/

1/2

1

8

0.21 0.21 0.22 0.21 0.20 0.20 0.22 0.22 0.22 0.21 0.23

1/1

1.00

1/1

Dr. Nancy Yamaguchi is the president of Trans-Energy Research Associates. She is a senior market analyst and contributing editor to FMN Media. Her work focuses on domestic and international energy markets, covering a wide spectrum of supply, demand, trade and pricing issues.

8.00

1/4

For the time being, fuel prices are below their preCOVID-19 levels, and a serious price rally is unlikely until demand picks up and overflowing inventories begin to be drained. Based on the latest product supplied data available, gasoline demand has recovered to approximately 74% of normal levels, diesel demand is at 87% of its expected level and jet fuel demand is at approximately 33% of its normal level. Economic recovery, and job recovery, will be the key determinant of the timing and strength of any demand recovery.

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION

6/25/2020 11:21:31 AM FMN Magazine SUMMER 2020 | 41

Fourteen predictions for the next 12 months of convenience retailing.

BY ROY STRASBURGER 42 | FMN Magazine SUMMER 2020

FuelsMarketNews.com

H

eading into early summer, the initial aftermath of the COVID-19 pandemic has seen shuttered businesses, a battered stock market, mounting job losses, a newly declared recession and a great deal of uncertainty about the future.

At StrasGlobal c-stores, gasoline volumes are down about 50% compared to last year, and store sales are about 75% of normal.

Customer counts are down, but the average purchase is up. And word is spreading about businesses and convenience stores that are closing on a permanent basis.

Outside the convenience channel, the businesses that have successfully navigated the pandemic so far have been grocery stores and online delivery services, such as Amazon, FedEx and UPS. As states relax stay-at-home restrictions, non-essential businesses are allowed to open as long as they follow certain conditions: curbside or to-go service only, social distancing, face masks for employees and restaurants limited to no more than 25–50% of their maximum occupancy level. So, as the crisis phase of the COVID-19 pandemic ends, where do we go from here?

These are challenges and opportunities the next 12 months could bring: 1. The current recession, which economists say began in February, will last for at least the next two quarters. Businesses that were closed will be slow to reopen—and many will not reopen at all. Unemployment will stay above preCOVID levels. The stock market will be choppy as production falls due to global supply chain issues and reduced consumer buying power. Available funding to start new businesses will be very limited, so few jobs will be created.

2. Although the U.S. is not out of the current pandemic, expect another wave in the fall as more businesses open and people lower their health precautions due to “social distancing fatigue.” There may be another round of shelter-at-home restrictions.

3. Health-care systems are going to remain under pressure as people who needed non-urgent medical procedures or want elective ones start entering the system after having waited for the COVID-19 crisis to pass.

4. Fuel gallons will remain significantly below last year’s performance. This is because more people will be working from home and commuting less; high unemployment rates will mean that more people are out of jobs and will not need to commute; road trips and vacations will be curtailed; and, due to the recession, people will be careful with how they’re spending their money.

5. Convenience store sales will return to near-average levels, although customer counts will remain 10–15% lower than last year. People will be spending more money online and trying to reduce their in-person interactions.

6. Average in-store c-store transactions will be 15–20% higher. Customers will continue to shop in anticipation of future restrictions (such as staying stocked up on toilet paper). They will also be trading up to the next level of product. In past recessions, customers have gravitated toward small luxury items such as craft beer, wine and chocolates because they are perceived as affordable luxuries and are impulse purchases.

FuelsMarketNews.com

FMN Magazine SUMMER 2020 | 43

8. Get ready—there will be more regulations involving health protection, employee rights and employee sick time provisions. Expect more health-related permits and certifications that will be applicable to your store and your employees.

StrasGlobal has developed a software program, Compliance Safe (www.compliancesafe.com), to track and manage permits and licenses. It reminds

Convenience store sales will return to near-average levels, although customer counts will remain 10-15% lower than last year. the company which permits need to be renewed while the local authorities have been shut down and, by centrally storing them in the cloud, allowing easy remote access to all of its permits and licenses without having to go to the store or office.

9. Customers will expect an enhanced online experience when shopping at a convenience store. Whether it is home delivery or curbside pickup, online ordering will become expected.

10. Store employees are going to expect more from their employers in regard to health protection and sick time. The COVID-19 pandemic has exposed huge 44 | FMN Magazine SUMMER 2020

gaps in the American health-care system, and either the government or employers are going to need to fill that gap to attract quality employees.

11. Convenience stores will become more like local supermarkets. The categories for groceries, dairy and fresh produce will expand as customers shop closer to home and seek to avoid the social distancing problems of large supermarkets. Consumers also will remember the grocery scarcity they encountered at the start of the pandemic and will look to diversify their shopping options.

12. Customer loyalty programs and customer contact information will become more important. One of the great obstacles for most convenience retailers during the start of the crisis was that they were not able to communicate directly with their customers. Retailers could not let customers know that the store was open, what was in stock, or what safety precautions were being taken in the store. If c-stores were not communicating, they risked being forgotten.

13. Fuel retailers will be squeezed as the cost of gasoline goes up and margins are reduced. Retailers will be slow to raise their retail price because they will be trying to maintain or increase their gallons. This will lead to a squeeze on margins which, combined with the reduced gallons, will cause many c-stores to fail.

14. Community involvement will become more important at the micro level. The pandemic showed us that our markets can be very restricted to the local neighborhood when people are on lockdown.

Customers are looking for a local solution.

We don’t know which, if any, of these predictions will come to pass. We do know, however, that the post-COVID-19 environment will be different from the recent past. We will need to remain flexible, ready and vigilant to meet the challenges. Stay well, my friends.

Roy Strasburger is the president of StrasGlobal.

For more information, visit www. strasglobal.com.

FuelsMarketNews.com

PHOTO©SISTOCK/TEMNIY

7. Health and safety will continue to be a major customer concern. People are not going to forget the impact of COVID-19 anytime soon. Customers will expect retailers to maintain high levels of infection prevention and safety in their stores.

Safeguards such as sneeze guards, social distancing and deep cleaning of stores will be expected and should be promoted by the store. Employee masks and gloves may become a permanent feature in stores (following Asia’s practice over the past decade).

LOWER FUEL COSTS. BIGGER BOTTOM LINE. Sokolis Group helps fleet and procurement managers reduce fuel costs and optimize fuel management strategies. Count on our national perspective to bring you savings locally.

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REST AREA

—for a While 46 | FMN Magazine SUMMER 2020

FuelsMarketNews.com

Regulators relaxed the rules during COVID-19, but the change isn’t permanent.

BY KEITH REID

T

he push to commercialize rest areas is one of those issues that never seems to fully fade, even though it similarly lacks the ability to gain notable traction. In the latest round, the Federal Highway Administration (FHWA) announced on April 3 that states may allow food trucks to operate at rest areas within the Interstate Highway System (with the required licensing) through June 15, as a response to the disruptions from the COVID-19 pandemic. Industry organizations, specifically NATSO with the support of 10 other associations including NACS, PMAA and SIGMA, had no significant objections to the policy— with one caveat.

“I do want to make sure it’s clear that we did not ask FHWA to rescind the order stating that they would not enforce the prohibition during the national emergency,” said Tiffany Wlazlowski Neuman, NATSO’s vice president, public affairs. “And what we asked them to do was to withdraw the non-enforcement notice after the declaration of emergency is over.”

The commercialization of rest areas has been barred since the earliest days of the development of the Interstate Highway System in the 1950s. The goal of the prohibition was to preserve the economic viability of smaller communities adjacent to the new highways that might otherwise be bypassed. That remains the case today, aside from grandfather provisions in several states that had already moved forward with development.

The occasional push to reverse the ban finds support in some states that see this as a potential revenue source. There are also arguments that commercialization would increase truck parking capacity.

Truck stop and convenience retailers (among other impacted parties) and the organizations that represent their interests broadly oppose these initiatives. They point out that any new revenue would, in effect, cannibalize business from existing retail outlets and directly harm local communities. NATSO also contends that research shows truck parking capacity decreases in areas where commercialization is allowed.

FuelsMarketNews.com

Further, changing the rules of the game would harm retailers, who in many cases have been serving interstate customers for generations. To add insult to injury, retailers would likely be denied the chance to compete for the business opportunities associated with commercialization. The primary retail operations would be a small handful of multinational companies like those found running retail operations in airports, for example.

The national and local responses to the COVID-19 pandemic created a range of extraordinary actions, and at times chaos, that invariably resulted in quick solutions to problems that in hindsight may or may not have been significant. In the case of the FHWA food truck decision, the outcome was a mixed bag.

KEEPING TRUCKS ON THE ROAD Supporting drivers during the pandemic has been a priority, and for long-haul truckers, that means meals, fuel and rest time. A combination of truck stops and convenience retail typically support these functions.

“In March, a lot of states and local jurisdictions said that the sit-down restaurants could no longer provide dining service,” said Wlazlowski Neuman. “What our members did was make numerous adjustments to accommodate the restrictions such as transitioning to curbside, takeout delivery or providing hot meals

Changing the rules of the game would harm retailers, who in many cases have been serving interstate customers for generations. from their dining-in restaurants for pickup at the deli or a convenience counter. So, we were providing a lot of food options for drivers.”

NATSO also worked with the International Franchise Association to provide information on the IFA website about where food was available at member truck stops.

In most cases, drivers had ready access to meals through conventional sources. However, that was not always the case.

FMN Magazine SUMMER 2020 | 47

“The Florida Petroleum Marketers Association pointed out that there were some routes in the middle of the state where the smallest guys weren’t able to stay open,” said Paige Anderson, director of government relations at NACS. “Ned Bowman, executive director of FPMA, has been a powerhouse on this and other issues. And the question was, how do we make sure the truckers get fed? But, as always, when there’s a need we find solutions.”

Unfortunately, what was a relatively minor problem was perceived, for a time, to be much more serious in some areas.

We learned pretty quickly that the public and the media don’t always know the difference between a truck stop and rest area.

“There were some states that temporarily closed their public rest areas, and we learned pretty quickly that the public and the media don’t always know the difference between a truck stop and rest area,” said Wlazlowski Neuman. “It was being reported that truck stops were closed, and that was never the case.”

Under the non-enforcement order food trucks could access rest areas, but they had to follow often-onerous state permitting processes—if the states decided to allow permitting—and many did not. As a result, the primary activity has been in a handful of states such as Arizona, Arkansas, California, Florida, Idaho, Indiana and Ohio.

While the pandemic’s painful economic impact on convenience store and truck stop operations has been well documented, not to mention the devastation to dedicated sit-down restaurants, reports on the impact to food trucks have been contradictory.

The National Food Truck Association has stated that up to 40% of food trucks are shutting down temporarily or permanently. Food trucks have traditionally relied on crowds, whether that is the lunch rush in a 48 | FMN Magazine SUMMER 2020

business area or a festival or event. Such opportunities are obviously far scarcer during lockdowns.

On the other hand, the mobility of the food truck concept allows a truck operator to seek out remaining pockets of activity and even pursue new revenue opportunities. It’s easy to find headlines touting food truck success stories—but not necessarily at rest areas.

“The irony is that this basically started in Arkansas because there was this perceived problem, but the food truck folks decided they weren’t getting any business at the rest areas, so they ended up moving,” said Anderson.

WHAT WILL COME NEXT? There is always the concern that once an initiative like allowing limited commercialization moves forward, it makes it easier to pursue such goals more aggressively.

The previous effort to allow the commercialization of rest areas in President Trump’s $2 trillion infrastructure plan in 2019 saw Congress soundly defeating the initiative in a bipartisan manner.

But a lot has changed in such a short time, and state budgets, many of which have long been strained, are now under extreme pressure after the losses incurred from the lockdowns. And states may be grasping at straws for potential revenue sources, even those with a questionable payback.

Conversely, the same pressures have ramped up for local municipalities and the retail locations that call them home. The National League of Cities estimates that cities, towns and villages will be facing a $360 billion shortfall. Rest area commercialization may put money in state coffers, but it will come out of the budgets of the interstate-adjacent municipalities. And the impact on truck stops and convenience stores would be another burden on already-strained operations.

The industry associations whose members will be the most impacted are watching the aftermath closely to make sure this policy area returns to normal, along with the rest of society as the lockdowns end.

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

FuelsMarketNews.com

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INDUSTRY NEWS

STUZO ACQUIRES HATCH

Stuzo, a leading provider of intelligent 1:1 loyalty and contactless commerce technology for everyday spend retailers, has completed the acquisition of leading retail customer activation platform, Hatch, a Lightbank- and Andreessen-Horowitz-backed company.

With Hatch’s capabilities, now unified under Stuzo’s Open Commerce® Platform, retailers have access to a variety of solution offerings including Open Commerce Activate for Intelligent 1:1 Loyalty, Open Commerce Transact for Contactless Commerce and Open Commerce Experience for Modern Digital Storefronts (available individually or as a seamless product suite).

PDI ACQUIRES ZIPLINE

PDI, a global provider of ERP, fuel pricing, logistics and marketing cloud solutions for the convenience retail and petroleum wholesale industries, acquired ZipLine, an industry leader for ACH payment and provider of mobile payment technology.

ZipLine processes over six million transactions a month for retailers like Circle K, Cumberland Farms, Irving Oil, Giant Eagle (GetGo) and Spinx. This saved operators more than $50 million last year in credit card fees that they were able to invest back into rewards and incentives for their consumers, resulting in greater customer loyalty. The acquisition strengthens the PDI Marketing Cloud Platform, giving businesses a full offering in a loyalty solution including customer engagement tools, offers, insights and integrated digital payments.

PETROCAPRE TO ACQUIRE 10 VIRGINIA GAS STATION LEASES

Petroleum Capital and Real Estate LLC, acting as the exclusive financial advisor to Heas Energy Services LLC, announced that the company had agreed to acquire the long-term leasehold and business interest in 10 gasoline service station and convenience store sites located in central Virginia. The gasoline service station and convenience store network is tightly clustered around the Lynchburg, Va., trade area. The chain consists of eight company operated convenience stores that operate under the Express Lane brand and two locations that operate under the commission agent class of trade. The retail network was previously operated by a local ExxonMobil petroleum distributor and convenience store operator.

50 | FMN Magazine SUMMER 2020

LEIGHTON O’BRIEN LAUNCHES ALARM MANAGEMENT SOLUTION

Fuel analytics technology provider Leighton O’Brien has launched its new ATG Alarm Management Solution (AMS), a cloud-based software platform featuring smart alarms and automated workflows to receive, prioritize and remotely manage up to 80% of alarms through to closure. AMS enables fuel retailers to optimize their ATG investment with remote, live monitoring of inventory and water levels, alarms and ATG-delivery data in a meaningful way via an online portal featuring dashboards and real-time reports. AMS’ intelligent alarms can reduce ATG-related maintenance costs by 50% by filtering out false ATG alarms to pinpoint real issues and better target maintenance spend.

IRELY ADDS TWO SALES LEADERS

iRely LLC, a premier global partner providing enterprise software for petroleum distributors and c-stores, announces the addition of two new sales leaders.

Ed Kane, director of sales, East, and Keith Haag, director of sales, West, both joined iRely in February 2020 to help set the company’s overall sales strategy, identify new target customers and to communicate the value that iRely software and the company’s unique suite of services bring to petroleum marketer and c-store organizations. iRely offers a fully featured, web-based ERP solution that focuses on both front and back office operations, along with an experienced support team that partners with customers from pre-sales through implementation.

CITGO EXPANDS CITGARD® AT FLEETPRIDE SERVICE CENTERS

FleetPride Service Centers is bringing the CITGO family of lubricants to new customers across North America, as CITGO is now the primary supplier of engine oil and other lubricants at all national FleetPride Service Center locations.

For nearly 40 years, the CITGO line of heavy-duty lubricants, including CITGARD engine oils, CITGEAR lubricants, and the CITGO family of transmission fluids, greases and more have evolved to meet the demands of heavy-duty diesel engines and component parts. Designed to keep vehicles on the road longer, CITGO products are engineered with a proprietary technology that helps vehicles achieve optimum performance and efficiency, run cleaner, operate at higher temperatures and fuel injection pressures and maximize efficiency and durability to reduce wear and tear.

FuelsMarketNews.com

Convenience Cares with

NACS Foundation

We’re an industry with heart, and we beat stronger together.

The NACS Foundation unites the convenience and fuel retailing industry under the strong foundation of caring for the communities we serve. Together, we’ll amplify the industry’s power to positively impact the lives of individuals and families of all ages in neighborhoods of all sizes.

NACS FOUNDATION SIGNATURE PROGRAMS

Our five signature programs work to increase the reach and resonance of NACS members' charitable efforts by shining a spotlight on them through powerful and engaging storytelling. Our programs include: Response Relief Serving First Responders Honors the heroes and first responders who help our communities when disaster strikes.

Neighborhood Nourish Caring for Neighbors Fights hunger by helping people experiencing homelessness or food insecurity.

Tomorrow Thrives Supporting Healthy Kids Supports children and families affected by illness and encourages kids of all ages to live active lifestyles.

Community Cleanup Keeping Our Towns Beautiful Helps beautify communities while raising awareness about environmental issues.

Future Fund Propelling Tomorrow's Leaders Invests in convenience store member employees and their children through scholarship and internship programs.

NACS Foundation is looking to partner with convenience and fuel retailers and suppliers, non-profits and the general public to launch these programs and signature events.

Contact Stephanie Sikorski, VP of Marketing, NACS; Director, NACS Foundation, to join the NACS Foundation in our mission: ssikorski@convenience.org.

Learn more: conveniencecares.org

INDUSTRY NEWS

DRIVERTECH TEAMS WITH DRIVEWYZE ON WEIGH STATION BYPASS

DriverTech, which provides ELDs and complete fleet management systems, has announced it is offering Drivewyze PreClear weigh station bypass as part of its in-cab platform. In addition to weigh station bypass opportunities at more than 800 locations in 47 states and provinces, Drivewyze is providing rest area alerts. This gives drivers “open” or “closed” notifications in states that have adjusted rest area parking during COVID-19. This works in tandem with DriverTech’s powerful truck-safe navigation and trip planning capabilities that enable drivers to find fuel stops or other truck friendly locations along their route.

A foodservice menu is in development. The average order is about double the size of the average in-store purchases.

KALIBRATE ACQUIRES TRADE AREA SYSTEMS

Kalibrate, a recognized authority in fuel pricing, location planning, market data and traffic count data, announced the acquisition of Trade Area Systems (TAS), a leader in location planning to the retail, shopping center and convenience store markets. The acquisition of TAS, located in Providence, R.I., builds on Kalibrate’s 2019 acquisition of Canadian business Kent Group Ltd. This is part of the Kalibrate Group’s strategy to add a strong set of planning products to its existing fuel retail offering.

PINNACLE’S PALM POS CERTIFIED FOR OUTSIDE EMV WITH NBS

The Pinnacle Corporation, a leader in pointof-sale, loyalty shopper engagement solutions and cloud mobile platform products for retail convenience stores, announced it has completed and certified the integration between the Pinnacle Palm POS™ point of sale and NBS payment processing host for compliance with AFD EMV for contact chip card card transactions. Live site testing will shortly begin at multiple locations. Pinnacle’s Palm POS with NBS provides petro retailers with a high level of protection against card-present data fraud and will accept EMV chip-cards for outdoor transactions using the Gilbarco FlexPay II terminal.

STRASGLOBAL LAUNCHES ONLINE ORDERING AND CURBSIDE DELIVERY

StrasGlobal, a leading provider of contract operations for gas stations and convenience stores around the country, has deployed new initiatives for its clients during the COVID-19 crisis—online ordering and curbside delivery among them. In early March, StrasGlobal created and shared with the convenience store industry its comprehensive, tactical COVID-19 Response Plan to communicate procedures that can quickly be implemented to protect the health of its teams and customers. As a contract operations company, StrasGlobal did not have an online ordering and pickup program before COVID-19 but knew it would be essential for its customers as part of its contactless response to the coronavirus pandemic. OrderEveryday.com offers beverages, snacks, tobacco and essential grocery items.

52 | FMN Magazine SUMMER 2020

TANKNOLOGY ACQUIRES COMPLIANCE TESTING AND TECHNOLOGY

Tanknology Inc., a global leader in environmental compliance testing, inspection services and fuel quality solutions, has announced the acquisition of Compliance Testing and Technology Inc. (CT&T), a Cedarburg, Wisc.-based provider of aboveground storage tank (AST) and underground storage tank (UST) compliance services. Recapitalized by company management and Hamilton Robinson Capital Partners (HRCP) in September 2019, the new investment enables Tanknology to continue to grow, both organically and through strategic acquisitions.

$

WEX AIMS TO HELP FLEETS STRETCH THEIR BOTTOM LINE

WEX, a leading financial technology service provider, announced the launch of its new business savings network, WEX EDGE. Designed for times like these to give small fleets and small businesses a competitive edge, WEX EDGE provides access to highly curated, discounted offers that are typically only available to large companies. By combining pre-negotiated savings with an easy-to-use eCommerce experience, WEX EDGE provides a convenient way for businesses to purchase the products and services needed to run their business at discounted prices—and use their existing WEX fuel account to pay for these services. In addition to fuel savings, WEX EDGE offers an integrated online tire purchasing experience with competitive pricing at more than 2,200 Bridgestone retail locations.

FuelsMarketNews.com

Las Vegas Convention Center / Oct 11-14, 2020

T H E S H A P I N G O F F U T U R E C O N V E N I E N C E

What does convenience look like in the post-

With your health and wellness

pandemic marketplace? What can you put into place

in mind, NACS will be offering

now, and where should your business be trending in

access to thought leaders and

the near future? How can you move forward, and

peer-to-peer information sharing

how are other retailers finding success?

in a variety of formats.

For more information and access to the 2020 exhibitor list, visit nacsshow.com/info

To Compete in the Convenience Industry You Need an Edge, Find Yours with NACS. Through tools and resources, exclusive events and opportunities to make lasting connections, NACS Membership helps convenience and fuel retailers from around the world stay competitive and profitable today, while preparing for tomorrow.

Are you getting in on the benefits?

See how at convenience.org/edge

2018_MPS_RetailMembership_HouseAd_half_UPDATED_111218.indd Half Horz.indd 1 1

OUR ADVERTISERS

11/12/2018 6/29/2020 12:13:08 4:35:38 PM

Thank you to these advertisers who have demonstrated their support of the fuels industry by investing in Fuels Market News.

ADD SYSTEMS............................................................................................................. 3

NORTH AMERICAN BANCARD..........................................................................39

AMERICAN COALITION FOR ETHANOL..................................................... 33

NORTHWEST PUMP PETROLEUM & EQUIPMENT....................................................... INSIDE BACK

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BIOBOR.............................................................................................................................. 5 www.biobor.com

CUMMINS & WHITE, LLP.......................................................................................41

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OPW RETAIL FUELING............................................................................................ 27 opwglobal.com/loopsystem

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SKYBITZ INC..................................................................... INSIDE FRONT COVER

KLEERBLUE DEF STORAGE & DISPENSING SYSTEMS............................................................BACK COVER

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MIDCONTINENTAL CHEMICAL COMPANY, INC.......................................17

SOURCE NORTH AMERICA CORPORATION............................................... 37

NACS FOUNDATION.................................................................................................51

THUNDER CREEK EQUIPMENT.........................................................................49

NACS MEMBERSHIP.............................................................................................. 54

TRINIUM TECHNOLOGIES.....................................................................................40

NACS SHOW............................................................................................................... 53

WPMA EXPO................................................................................................................55

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www.conveniencecares.org www.convenience.org/edge www.nacsshsow.com/info

54 | FMN Magazine SUMMER 2020

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FuelsMarketNews.com

INDUSTRY NEWS

SHELL LAUNCHES FLEET MAINTENANCE HUB

Shell Oil Products US, one of the largest branded commercial fleet fuel card providers in the world, announced the launch of Shell Fleet Maintenance Hub, a digital maintenance platform that grants users access to all of their fleet maintenance data and a network of discounted maintenance providers through a single online portal. The platform also allows users to conveniently schedule service, approve or decline work, pay for maintenance and create user permissions and roles to streamline the fleet management process. The maintenance hub allows managers and drivers to search over 20,000 nearby shops, providing upfront pricing—offering the typical customer up to 26% off standard retail pricing when they book service through the Shell Fleet Maintenance Hub.

ADD SYSTEMS ANNOUNCES NEW INTERFACE WITH COMDATA

Advanced Digital Data Inc., a leading supplier of software solutions to the energy distribution and convenience store industry, has announced an interface with the

latest Comdata SmartSolutions point-of-sale (POS) systems.

Now, ADD eStore users can take advantage of Comdata’s streamlined process with these EMV certified systems that can handle various types of payment options, including major credit cards, fleet cards and proprietary cards.

$

MARTIN EAGLE OIL SELLS COMMERCIAL FUELS BUSINESSES

Matrix Capital Markets Group Inc., a leading, independent investment bank, announces that it has advised Martin Eagle Oil Company on the sale of its municipal and commercial fuels businesses and transportation affiliate, Southwest Transport Co., to U.S. Venture Inc., d/b/a U.S. Oil. Martin Eagle Oil Company is a leading petroleum marketer and fuels distributor based in Denton, Texas, and serves customers primarily in and around the Dallas-Fort Worth metroplex and north central Texas. The company markets or supplies fuels to retail outlets, municipal/government and commercial accounts. Southwest Transport Co. is a Martin Eagle affiliate that transports and distributes fuels to customers of Martin Eagle, as well as other third-party customers.

EXPO February 16-18, 2021 Save MONDAY, February 15 8 a.m. - 5 p.m. ...................................... Trade Show Setup 12 p.m. ........................................Silent Auction OPENS 12 - 5 p.m. .............................. Registration OPEN

TUESDAY, February 16 7 - 9 a.m..................“Get Up & Go” Breakfast Buffet Open 7 a.m. - 6 p.m. ..........................Registration OPEN 8 a.m. - 12 p.m. .................................... Trade Show Setup 8 a.m. .................... ....... Scholarship Golf Tournament 8 a.m. -1 p.m. ........................EDUCATIONAL SESSIONS 2 - 6 p.m. .................................. Trade Show OPEN

at the Mirage in Las Vegas, NV

EVENT SCHEDULE TUESDAY, February 16 continued

WEDNESDAY, February 17 continued

5-6 p.m. ........Welcome Reception - on trade show floor Evening Open ...................................Suppliers Hospitality

3:30 p.m. . ................................................ Brand Meetings 5 p.m. ..................................................... Cardlock Meeting Evening Open ...................................Suppliers Hospitality

WEDNESDAY, February 17 7 a.m. ..................................................... Cardlock Meeting 7 - 9 a.m..................“Get Up & Go” Breakfast Buffet Open 7 a.m. - 4 p.m. ..........................Registration OPEN 8:30 - 10 a.m. ...................................KEYNOTE SESSION 10 a.m. - 3:30 p.m. .................... Trade Show OPEN with Buffet Lunch 12 - 2 p.m. ..........................................Ladies’ Luncheon

www.wpmaexpo.com NACS-FMN20 Summer hlf0618-STDWX21.indd 1

Half Horz.indd 1 FuelsMarketNews.com

Date!

the

THURSDAY, February 18 7 - 9 a.m..................“Get Up & Go” Breakfast Buffet Open 7 a.m. - 12 p.m. ........................Registration OPEN 8 - 9 a.m. ................................. EDUCATIONAL SESSION 9 a.m. - 12 p.m. ......................... Trade Show OPEN with Buffet Breakfast 11 a.m. ...................................... Silent Auction CLOSES

Subject to change WPMA

6/18/20 12:48 PM

6/25/2020 11:27:09 AM FMN Magazine SUMMER 2020 | 55

REMEMBER THIS?

Disease Sweeps the Land

BY KEITH REID

T

he specter of death hung in the air. A pandemic was sweeping the world and the first, rather mild wave from the spring had largely passed as more of an irritant than a dire threat. However, as the calendar turned to September, a second, more deadly strain struck. For the next three months the carnage was enormous. October alone saw 195,000 U.S. deaths in a population of 103 million.

There was a brief respite in December, but a third wave, though not as deadly, flared up in January 1919.

The year was 1918, and the pandemic was a strain of the H1N1 influenza virus that was labeled the “Spanish Flu.” It would kill somewhere between 20 and 50 million people throughout the world, its spread enhanced by the movements of World War I. NPN was there to cover the impact on the industry during the intense months of October and November 1918.

NPN covered the lives of the leading (and often not so leading) figures in the industry, including death notices.

And that is where the flu began to show up. Here is one of approximately 10 or so examples: “Members of the oil industry, especially in the East, where he was widely known, learned with deep regret of the death on October 6 of Vincent M. Ward, manager of the Elk Refining Company… Young Mr. Ward, who was a victim of influenza, had made rapid strides in the oil business since his graduation a few years ago from the Rensselaer Polytechnic Institute.”

The most notable death was Lauren J. Drake, president of the Standard Oil Company of Indiana.

Several short articles covered the impact of the pandemic in the oil fields and refineries. “10-barrel wells are about the speed of the late completions in W.Va., and the week closed with few features of note. The epidemic of Spanish influenza has handicapped operators as many men are ill and it is been difficult to supplant them.”

The only major article—and it was substantial—ran on November 6: “Oil

Industry Is Winning the Battle Against Influenza Plague” covered the efforts the industry made to limit the spread of the disease and provide medical support to the afflicted.

As the article noted: “While the epidemic is still having serious effects, general reports from all parts of the country show a dedicated tendency for the better. The methods used in fighting the plague range from requiring all employees to wear masks at work, as was done by the Standard of California in its various plants, to sending out medical kits to the workers in the field with directions how to use the various preventatives designed to protect them from infections.”

After that, influenza coverage tapered off.

What was striking was how the 1918 pandemic—though far more lethal than today’s—was treated more as a background issue to the regular function of the industry. It’s easy to say we were “built of sturdier stuff” back then, but that lacks nuance. If people were sturdier it was because while industrial technology and engineering were making amazing leaps and bounds, medical technology was lagging.

In 1918 there was no expectation of medical miracles, and disease and death were commonplace. If you became afflicted with one of the many deadly diseases, or even got a bad infection from a cut, survival was often a roll of the dice. The flu, and the death it carried, were just a part of life.

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.

56 | FMN Magazine SUMMER 2020

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