Maintaining healthy margins is a science that must be mastered by all distribution companies. In the propane industry, businesses have been fighting for growth despite a downward trend in propane usage over the last 20 years. The outlook in 2017 is a little more positive; a presentation by ICF at the North American Propane Gas Association EXPO noted that residential housing markets for propane are improving and expected to grow at 3.5% per year.
Distribution costs are influenced by a variety of factors, but lowering them doesn’t have to be a complex process. Here are three strategies you can employ to stop leaking profit and reduce your propane distribution costs.
1. Install tank level monitors on your propane tanks
Many businesses aren’t checking tank levels at all. They’re just calling their distributor when they think they need a refill. As a distributor, you have the option to offer your customers a solution that benefits you both. Installing monitors on your customers’ tanks allows distributors to keep track of levels and avoid those frustrating emergency refills. Customers can rest assured that you’re keeping their tanks full, and you can stop leaking the costs associated with emergency deliveries. It’s not just about knowing when it’s time to roll a truck; you also need to know when it’s more cost-effective to wait until the customer has used more of their propane. Without an accurate way to monitor and predict liquid levels, you’re out of luck.
2. Use IoT container logistics software to talk to your tanks
Installing hardware that monitors your propane tanks is only half the solution; the software component of tank monitoring is just as vital. Internet of Things (IoT) technology can simplify cost cutting by reading tank levels and turning the data into actionable insights. Ideally, your container logistics software would communicate with your truck logistics software, allowing you to streamline your dispatch process and avoid wasting fuel. The beauty of the IoT is that all your assets and processes can fall under the same umbrella and work together to improve your distribution efficiency.
3. Use the propane tank data to plan for the future
Monitoring tank levels remotely makes it possible to respond to customers’ needs at the right time, but the real benefit of tank logistics software should be the ability to plan ahead. When you start tracking tank levels, usage patterns won’t be immediately known. Your customer’s usage rate may not be entirely predictable, but over time, the trends will become clear. Make sure your tank logistics software allows you to access the historical data you need to analyze.
How Shasta Gas Reduced Propane Distribution Costs
Shasta Gas Propane, Inc. promises its customers three things: safety, service, and savings. Offering savings to your customers is easier when you’re not leaking profit. Shasta Gas was wasting time and money by making trips to refill their customers’ tanks before they started using a tank logistics solution by SkyBitz Tank Monitoring. “SkyBitz provides us the timely and accurate tank data needed to control distribution costs, from the office all the way to the driver,” says Chuck Kinnie, President of Shasta Gas. This propane company has since seen a significant cost reduction in their operations.
If your company is looking to reduce distribution costs, SkyBitz Tank Monitoring offers solutions for tanks containing chemicals, petroleum-based fluids, propane, compressed gases, and more. Contact SkyBitz Tank Monitoring today to get started and see the same success as Shasta Gas!
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