The anniversary winter marking 10 years since the supply and distribution challenges of 2013-14 is now complete.
Judging by historical data and operational assessments from the front lines, the industry endured a mostly mild heating season overall, except for several pockets of the US that saw notable weather events.
But what if the industry had faced a prolonged cold weather event? What if the polar vortex that appeared this past January hung around for weeks or longer, like it had 10 years ago, with the Upper Midwest and Great Lakes regions facing harsh conditions for much of the heating season. Would the industry have been ready?
Based on our Top Propane Retailers survey from late last year, the industry has been taking the necessary steps to ensure supply security.
We asked retailers about what they’ve accomplished in the past 10 years to increase the reliability of their propane supply and distribution business. Many took the time to share their professional insights.
“The winter of 2013-14 taught us a vital lesson: Expect the unexpected, especially in supply chain management,” a propane retailer in Washington says. “Now, we don’t just rely on one way of getting propane. We’ve diversified – more suppliers, different transportation methods and bigger storage. This strategy helps us, and our industry, stay robust against harsh winters, ensuring our customers aren’t left in the cold.”
Diversification across the board was a common point made in the survey responses. Here’s a list of some other strategies and comments from retailers.
⦁ Increased storage capacity and capability.
A retailer in Indiana says it has added storage each year since 2014 and capitalizes on cavern storage where geographically available.
A New Hampshire retailer shares that it started construction on a 120,000-gallon propane plant to increase current capacity and help meet its future needs.
“We continue to upgrade our bulk plants in both capacity and speed,” says a retailer in Wisconsin. “At this time, during our peak, we have an eight- [to] nine-day supply of propane.”
⦁ Added vendors “to ensure more allocation in the event there is another shortage,” says a North Carolina retailer.
⦁ Multiple pipeline and rail terminals.
“We have also added our own rail terminal through a recent acquisition,” another Wisconsin retailer says.
⦁ Deployed an independent truck fleet “to reach outside of the normal market if necessary” and hired a supply chain manager “to facilitate and monitor changes as needed,” a Virginia retailer shares.
“We’ve invested into more trailers, trucks and drivers, and have captured product at over 10 more terminals in the past 10 years,” a Colorado-based company adds.
⦁ Embraced technology, including tank monitors and routing systems.
“We have implemented technology to assist with our demand forecasting and work toward long-term forecasting to ensure our supply chain is stable,” an Oregon retailer says.
⦁ Gained more summer accounts “to ensure we have a more consistent gallon flow,” a New York retailer shares.
⦁ Locking in gas and using pre-buy and fixed contracts.
“We have begun to book propane for multiple years and now contract earlier in the year with our customers to make sure we have allocated enough propane,” says an Illinois retailer.
⦁ Better overall communication with customers and suppliers.
“We stay in regular contact with our customers by checking on them each month,” a Mississippi retailer says.
⦁ Customer incentives for more tank fills in the offseason.
While many retailers have adjusted their operations over the past 10 years, not everyone was happy with our question, though.
“Get over it. It was a propane shortage,” a Minnesota retailer responded. “Retailers managed it as well as can be expected. “You are living 10 years in the past and should be looking to the future.”
Looking to the future appears to be exactly what the industry is doing more of today.
