Small Fuel Oil Marketer Expands With Personal Customer Service
Sep 1, 1997 12:00 PM
A FUEL OIL distributor does not have to be big to succeed. A small operator can thrive by offering personalized, professional service to customers.
This premise encouraged Peter MacFarlane to enter the fuel oil business 51 years ago. Shortly after the end of World War II, the native Bostonian began to learn the fuel oil business from a man who eventually sold the company to him.
When his 17-year-old son, Scott, received his oil burner license in 1969, the distributor had three tankwagons and five service trucks. Delivery of fuel oil that year to 900 customers totaled about 2.25 million gallons.
This past winter, residents in the Boston area experienced record amounts of precipitation. Some 24-hour periods resulted in several feet of additional snow.
Despite blizzard weather conditions and streets blocked by fallen trees and broken power lines, the fleet of seven tankwagons delivered more than five million gallons of fuel oil to residential and commercial customers.
"We were plowing driveways and streets, towing our trucks through snowbanks, and hauling oil to several customers in 10-gallon cans because there was no other way to get to their houses," says Scott MacFarlane. "When the weather gets rough, you have to use any available method to keep customers from running out of fuel."
Located a few hundred yards from the Boston city limit, Peter MacFarlane Inc in Dedham, Massachusetts, services more than 3,500 customers. Residential customers represent 90% of the company's accounts.
In addition to hotels, schools, apartment complexes, and utility plants, 25 local churches receive fuel and service from Peter MacFarlane Inc. More than $1 million in annual revenue comes from service calls, boiler installations, and the replacement of underground fuel tanks with new and smaller above-ground storage tanks.
Controlled Growth The long-term strategy of Peter MacFarlane Inc has been to grow the fuel oil business at a controlled rate. In 1988, the carrier made its first company acquisition that resulted in an additional 325 customer accounts.
"We see very few companies as potential acquisitions that fit the parameters of our business for healthy growth," MacFarlane says. "We are primarily interested in acquiring customers who are service-oriented. During the past 10 years, new accounts have averaged about 150 each year. Expansion at too fast a rate can result in the loss of your existing customer base.
"There will always be some company in the industry that is willing to offer a lower price. But we try to educate our customers that lower price without dependable service is no bargain.
"Companies with big telemarketing departments don't deal with customers on a one-to-one basis, and that opens opportunities for companies like ours. There will always be a place for the small fuel oil distributor that provides personalized service."
Working aggressively, Peter MacFarlane Inc has built a year-round fuel oil business. "Winter will always be the peak season for us," Scott MacFarlane says. "We've already bought 1.5 million gallons of oil for the upcoming heating season to keep prices stable."
Residential customers use between 800 and 1,000 gallons of fuel oil during the heating season. Large apartment buildings sometimes use up to 25,000 gallons.
Customers are served by experienced fuel oil delivery drivers. Drivers are full-time and part-time employees, and all of them have hazardous materials endorsements on their driver licenses.
Deliveries are made within a 15-mile radius of the company. Many are to customers living in multi-storied apartment complexes and condominiums in densely populated areas.
Dense Delivery Area Drivers work eight to 10 hours a day and average 35 deliveries per trip. During the coldest winter months, drivers sometimes handle 50 to 60 deliveries per day.
"One time in the early 1970s, I personally made 72 deliveries and hauled 17,300 gallons in less than 11 hours," MacFarlane says. "Drivers are assigned to a specific area so they don't waste time searching for addresses on a map."
Drivers are provided with well-maintained tankwagons. Cargo tanks range in size from 3,200 to 5,200 gallons. The newest delivery vehicle is a 1996 Volvo FE with a 165-inch wheelbase.
The truck is equipped with a 260-hp engine and an Allison MD 3060P five-speed electronic transmission. Drivers like the automatic transmission for easy shifting in heavy traffic on narrow city streets.
12-Year Truck Life Running gear includes a Volvo front axle and Eaton rear axles rated at 16,000 and 23,000 lb, Accuride wheels, and Michelin radial tires. Cabs are equipped with ticket printers and lap pads by Liquid Controls, Panasonic AM-FM stereo radios with weatherband, and National air-ride driver seats.
"We expect a new chassis to perform reliably for at least 12 to 15 years," MacFarlane says. "Volvo made one of the best cabovers for local delivery. I would have bought more this year if Volvo hadn't stopped making them."
Volvo Trucks North America Inc says the company stopped taking production orders for the FE model in December 1996. The decision was made in part because the market for Class 7 trucks has been shrinking during the past 10 years.
Older trucks in the fleet include additional Volvos, an International, Scania, Peterbilt, and a 1974 Brockway with a rebuilt 671 Detroit engine.
A 1995 Peterbilt 320 LCF is equipped with a 300-hp Cummins L10 engine and a Fuller 10-speed transmission. Other equipment includes Eaton front and rear axles, Eaton automatic slack adjusters, Delco starter and alternator, Cummins air compressor, and Jacobs engine brake.
The carrier specifies tank vessels built by Boston Steel & Mfg Co for all its tankwagons. Standard equipment includes Scully overfill protection, Emco Wheaton bottom-loading adapters, Chelsea PTOs, and Goodyear hoses.
The fleet plays an important role in the marketing program at Peter MacFarlane Inc by ensuring that customers don't run out of product. The carrier makes sure that trucks are ready to go whenever a customer needs a delivery.
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