Retrofitting Truck Equipment Enhances Sharp Propane Profit
Sep 1, 1999 12:00 PM
A RECENT decision to replace mechanical register systems with electronic preset controls on the company's tank trucks is one way Sharp Propane of La Grange, Texas, enhances profit. By installing the equipment, delivery accuracy is greatly improved. In today's competitive marketplace, using every measure at hand to contain costs while at the same time improving customer service is essential, says owner Mike Sharp.
"Upgrading the vehicles will save us in accounting an additional 1,200 gallons per truck per year," Sharp says. "That adds up significantly when we multiply 1,200 gallons times the 30 bobtails we use. The new two-step system will electronically calculate the amount of propane that is delivered. Before, we always had a problem with accuracy because of the way the system shutdown suddenly."
The new system slows the transfer of product when the tank being filled is within three gallons of capacity and then shuts off at the preset stop. Drivers activate the pumping and metering from the back of the truck, cutting in half the number of trips they make from the truck to the tank.
Working with representatives from Gas Equipment Inc in Houston, Texas, a distributor for the Liquid Controls LLC equipment, Sharp has begun the process of retrofitting the registers on all of the trucks. The work is being done at R&W Supply in Tyler, Texas, as are all major vehicle repairs and maintenance, and new tank installation.
In order to make the changeovers, Gas Equipment Inc provides a technician to assist with the process. "Rewiring is done from the cab to the back of the truck, says Jim Chaney, Houston manager of Gas Equipment. "The plumbing doesn't have to be changed. After the retrofitting is completed, the registered amount of propane delivered is almost 100% accurate."
Although the electronic instrument is not new, improvements in the last year or two have made it more effective, says Chaney. Earlier, the systems could receive interference from outside radio frequency sources such as portable phones or other remote devices.
In addition to the register upgrading to the fleet, Sharp will be making purchases of diesel trucks to supersede the gasoline/propane units now in service. "We think we will get longer life from the diesel engines," says Sharp. "And the laws have changed so that we can't do the conversion work required for propane, which makes it more expensive."
Storage Capacity Equipment retrofitting and purchases are part of Sharp's overall emphasis on maintaining good customer service. One way of serving customers is to have significant storage capacity at each of the 12 company locations so that trucks can respond quickly to demands. Overall storage capacity totals about 600,000 gallons. Typically, each facility has one 18,000-gallon tank and one 30,000-gallon tank supplied by Trinity Industries, and equipped with Blackmer and Corken pumps for loading and unloading and Blackmer compressors for vapor recovery.
Most of the product comes from Texas plants operated by Duke Energy Inc at Halletsville, and PG&E at Three Rivers and Yoakum. Pakias Transport, Houston, is a major bulk carrier for Sharp and operates one transport owned by Sharp.
"We don't have a problem in keeping our customers supplied," Sharp points out.
Customers are scattered throughout the service area that extends northwest to Austin, west of Houston, and south to San Marcos. Although residential use of propane has historically been confined to houses in rural areas and mobile homes, the most recent growth is occurring in Austin suburbs, particularly as new home buyers learn tanks can be hidden from view by putting them underground. Sharp estimates at least half of the new accounts in Austin require underground installation.
"People in the cities are more aware today of propane and how economical it is for home use," he says. "We work closely with a growing list of Austin area builders. Plumbing the gas lines during construction is the most cost-effective way to install lines for propane. We can plumb the lines or check for leaks on lines installed by a builder's subcontractor."
Propane is used to fuel various appliances, including water heaters, ovens, cooktops, clothes dryers, furnaces, swimming pool and spa heaters, gas fireplace logs, and outdoor gas grills.
Because of the Austin market growth, Sharp bases nine bobtails at five locations there. Other offices are in Seguin, Flatonia, Carmine, Hearne, Smithville, Bastrop, and La Grange. Each office has an appliance showroom and shop for appliance service and minor truck repairs. A dispatcher is assigned to each location.
After delivery runs are completed, invoices for billing are turned in at the office. Sharp plans to add a system that will link the software in the office to the equipment on the trucks to provide real-time billing - and later a satellite tracking program for communication with trucks. For now, two-way radios from Motorola are used by drivers to stay in touch with the office.
Thirty Drivers Sharp employs 30 drivers for propane delivery. The drivers remain with the company for several years. "Retention is pretty good," says Sharp. "But it is much more difficult in the Austin area because the job market is so good." He estimates that it takes about 90 days to train drivers and a full year before they are significantly productive. They need time to learn the company territory and to find the customer locations, many in remote areas.
"We have to take our time in training," says Les Browning, vice-president for safety and compliance. "We have to be sure they are qualified for the job before we send them out."
Prospective drivers are required to have a commercial driver license with hazardous materials and air brake endorsements. Once they enter the training classroom, they receive instruction, are shown videos, and issued books and pamphlets. Hands-on exercises are provided for loading and unloading procedures, both at the truck and at the storage facilities. Upon completion of training, drivers are required by Texas law to demonstrate their proficiency in a hands-on test conducted by an officer of the Texas Railroad Commission. In addition to loading and unloading procedures, drivers must have knowledge of the workings of pumps and compressors at storage sites, pneumatic valves, and automatic shutoff equipment.
Sharp requires all drivers to attend a monthly safety training meeting conducted at each sale office.
"We vary days and times to accommodate driver schedules," Browning says. "Usually, we have the sessions early in the morning before they begin their routes."
Vehicle Maintenance Having well-trained drivers is a top priority at Sharp, as is providing them with well-maintained vehicles. When trucks require major repairs, they are sent to the dealer. Tank and tank equipment repairs are scheduled with R&W Supply.
New trucks are examined and oil changed at the first 3,000 miles, says Ted Parks, corporate treasurer. Other scheduled maintenance is conducted as required by the Department of Transportation. "The main thing is that the procedures are consistent," he adds.
With a five-year trade schedule already established, Sharp has ordered three Peterbilt 330 trucks with aluminum cabs and air-ride suspensions from a Houston Peterbilt dealer, Rush Truck Centers. The trucks have Caterpillar engines rated at 190-300 horsepower. Also part of the drive train are Fuller six-speed transmissions and Spicer 14-inch clutches.
Eaton supplies the front axle and rear axle with a 3.70 ratio and slack adjuster. The antilock brake system is from Meritor Wabco. Wheels are supplied by Accuride Corporation. The tanks are mounted on chassis from Peterbilt, GMC, International, and Chevrolet. The gasoline trucks are adapted for propane.
The MC331 tanks are supplied by Texas Welding and Mfg Co and Aero Tank Co and vary in capacity from 2,400 gallons to 3,000 gallons. They are equipped with Fisher valves, PTO-driven Corken or Blackmer pumps, and Hannay reels.
Adopting a five-year trade cycle for three trucks has been a longtime procedure for Sharp Propane. The company's founder and Mike's late father, EO "Sam" Sharp, started the schedule. He had established the company in 1949 with one delivery truck and one service truck in Smithville and gradually expanded the service territory.
Mike Sharp joined the company in 1967 and made deliveries, worked on appliances, and managed an office before taking over the company at his father's death in 1998. Sharp continues his father's philosophy of customer service. "My phone and door are always open to customers," he says.
The company grew through boosts in the market in the 1980s and a few acquisitions. In 1990, Sharp became an Ozarka dealer, delivering drinking water in five-gallon containers, a diversification compatible to propane delivery in that it is route centered and service oriented.
As for the future, Sharp is optimistic. "We expect residential growth to continue. Retail sales are up, especially with incentives on appliances such as rebates. We are upgrading our showrooms and office fronts. Green awnings in the company color are being installed for a higher company profile where the offices are located. I think we have a good product and the market will continue to grow.
"In addition to that, we have the strong foundation of our employees. Our family could not have made this company a success without our employees. Their loyalty through the years has been immeasurable."
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