Hollingsworth Oil success story stems from close eye on fuels market, growth
Oct 1, 2002 12:00 PM, By Mary Davis
RONNIE Hollingsworth, president of Hollingsworth Oil Company, keeps a close eye on the fuels market. So as margins deteriorated, he took action.
“You have to get bigger or get out of the business,” says Hollingsworth. “We know we have to have volume, plus diversification, to compete in this marketplace.”
Since 1974, he has met the volume requirements by acquiring 10 companies and consolidating them with the parent company in Springfield, Tennessee. Gradual diversification came with a move into residential and commercial construction, convenience store operations, and car wash system installations and service. Two additional companies were established: Lynn Transport with four divisions, and J&R Management, which oversees the convenience store side of the business. Hollingsworth Oil Co operates as a wholesale marketer, and fuel distribution remains the company's primary focus.
Hollingsworth's two daughters, Rachel Hollingsworth and Jinnifer Johnston, also are active managers in the company operations. Rachel oversees the retail division, and Jinnifer is vice-president of Hollingsworth Oil.
“Last year, we purchased Jackson Oil Company to enhance our lubricants business,” says Johnston. Like many technology-age acquisitions, this one proved difficult to integrate with the parent company because of incompatible computer systems, but with perseverance the obstacles were overcome.
Today, Hollingsworth Oil grosses $160 million annually, supplying convenience stores, trucking companies, farms, and marinas in Tennessee and adjoining states. Products handled include gasoline, diesel, kerosene, waste oils, and ethanol. The company also sells a biodiesel product that is stored on-site. For marinas, the company provides Valvtect additives for diesel and gasoline. Suppliers include Amoco, BP, Shell, Phillips 66, Exxon, Citgo, and Texaco.
In addition to the Springfield main office, terminals are located in Clarksville, Tennessee. The fleet includes 14 transports and three tankwagons.
At the Springfield location, nine storage tanks with capacity of 32,000 gallons are used for kerosene, biodiesel, 87 octane and 93 octane gasoline, and low- and high-sulfur diesel. The Clarksville facility has six 20,000-gallon storage tanks for the products. Equipment on the loading racks include OPW loading arms, Veeder-Root and Neptune meters, A O Smith and Tokheim pumps, and Tuthill EECO tank gauging systems. Both loading racks pump product at about 80 gallons per minute.
Ronnie Hollingsworth and Johnston study the commodity market for fuel prices, knowing that their suppliers will provide the next day's price at midnight. They use FastRacks, a DTN Energy program that provides loading rack prices gathered from 1,200 terminals nationwide. The service provides both suppliers and marketers with petroleum price discovery on a daily and historical basis.
“By 5 pm, the price is pretty much set,” says Johnston.
They receive the price they will pay at their suppliers via satellite and enter it into the company's software program designed by AIMS Inc. AIMS is a developer and supplier of data processing products and services for the petroleum products distribution industry, and the related convenience store industry. Hollingsworth Oil uses the Compas program, a system that includes procedures for automatic general ledger, inventory control, accounts payable and receivable, sales order, convenience store controls, and fuel tax reporting.
The AIMS program also is used by customers who manually measure storage tank volume and report the information through the automated system, which interprets the data and creates a report. The report is reviewed at Hollingsworth Oil for appropriate service, and passed on to a dispatcher for assignment to a driver.
Johnny Stewart, transportation director, coordinates the distribution schedule. Drivers are assigned regular schedules and stop at the office to pick orders before heading out on the route. They are rotated so that in addition to regular days off, they receive a three-day weekend each month.
“There is always someone on the road,” says Johnston. “We work 24/7.”
In addition to company training, drivers undergo instruction at each supplier's loading rack. Hollingsworth Oil's training, directed by Stewart, includes company policies, Department of Transportation regulations, defensive driving, and hazardous materials handling. New hires spend up to six weeks on the road with a driver/instructor.
The driver pool has remained steady for the company, despite an industrywide shortage, says Stewart. About 20 drivers are employed, and most of them have been with Hollingsworth Oil for seven to eight years or more.
Having loyal drivers has been part of the history of Hollingsworth Oil for almost three decades. However, company roots extend to the 1930s, when Ronnie Hollingsworth's grandfather operated a service station called Sudden Service, a name that lives on in the company's convenience stores. Before long, he had established a petroleum dealership, Orman Oil Co, and was active in the business until he died in 1961. At that time, Ronnie Hollingsworth's father and uncle took over. By 1973, Ronnie Hollingsworth had graduated from college and in 1974 was involved in the operations, starting an Amoco jobber division. Hollingsworth Oil is a totally separate company, started independently of Orman Oil.
“That first month we handled 100,000 gallons,” he recalls, noting the company's growth. “In August this year, we handled 12.5 million gallons.”
Farming has been a strong market for the company because of the area's tobacco and soybean production. Hollingsworth Oil monitors some of the farms' storage tanks while others are served on order. But it is the company's and other convenience stores that command the majority of the petroleum business. Hollingsworth Oil serves 29 of its own stores as well as 210 others.
Tank trailers serving the convenience stores typically have four compartments and are supplied by Heil. Three transports have five compartments. The newest trailers are equipped with OPW bottom-loading adapters, Knappco emergency internal valves, Scully Intellichek overfill protection, OPW vapor vents, and Betts Tiona domelids. Trailers are specified with a safety-bar-style brake interlock valve.
The running gear includes Reyco Transpro spring suspensions, ArvinMeritor axles and S-cam brakes, and Binkley landing gear. Betts supplies lighting and wiring.
Hollingsworth Oil tankwagons are provided by Moore Truck-Trailer Sales of Nashville, Tennessee. The company specifies large tank wagons, preferring them for making deliveries in towns. The 4,500-gallon tanks are equipped with Betts domelids and vapor vents, Morrison Bros emergency valves, EBW bottom-loading adapters, and Scully overfill protection. Components also include Hannay reels and Liquid Control meters. Pumps are from Blackmer.
Tanks are mounted on Kenworth chassis with 330-horsepower Cummins engine and nine-speed Eaton Fuller transmission.
To keep the vehicles operating on a precise schedule, the company has a five-bay shop in Springfield for preventive maintenance and repairs. Routine maintenance is provided for the company's Kenworth tractors and tankwagons. Other procedures are provided by the dealer. Except for vessel repairs, the tank trailers receive full maintenance at the company shop.
Other maintenance facilities on-site are dedicated to convenience store equipment maintenance such as pump rebuilding and repairs. The car wash equipment, for company and other convenience stores, also is maintained in the shops. Hollingsworth Oil is certified by the Environmental Protection Agency to leak-test underground storage tanks, another service the company provides.
By diversifying, Hollingsworth Oil is able to supply many services in its area. The company's success is a testimony to Ronnie Hollingsworth's understanding of the need for diversification and the demand for volume. Furthermore, the owners are eyeing the future with plans for further growth through acquisition of other companies and expansion of their convenience store locations.
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