Is that Bulk Fuel Storage Tank a Liability?
Many companies have bulk fuel storage tanks and it seems like a great idea when it comes to efficiency and saving money. But is it really? We often hear “We no longer have to fuel at the Gas Station, we have a tank on our yard”. Or, “We want a bulk fuel tank so we can start saving money”…
A Closer Look At The Costs And Risk Of Bulk Fuel Storage Tanks
While it is a very convenient option for many companies, there is risk associated with having a tank on your property. You need to understand these risks and be prepared in the event of an accident. You also need to understand what expenses come with owning a tank. Tank ownership introduces city regulations, permitting expenses, inspections, insurance, training, and ongoing maintenance to name a few. There are also other fuel delivery options that may make more sense. Here’s the dirt on tanks.
The most obvious issues revolve around the potential for accidents and the costs associated with cleaning those accidents up. It’s just a matter of time and not a question of “If” but “When” there will be an accident.
We’re always surprised when we ask companies if they have consulted with their insurance company to see if they have coverage for a fuel tank on the yard, and what the impact will be to their premiums. Insurance companies see thousands of gallons of flammable fuel as a risk. Environmental issues have to be taken into consideration as well. Diesel spills happen and cleaning them up is a VERY expensive endeavor.
To minimize these risks, you have to have state of the art equipment, highly trained staff, and a rigorous maintenance routine. When you understand the “True Cost” of an onsite tank, those supposed “Savings” tend to just evaporate into thin air. Owning a tank is a serious long-term commitment with potentially serious unintended ramifications.
WHAT IS AT RISK OF A BULK FUEL TANK
Let’s talk about fuel theft, it’s a real problem for Bulk Fuel Tank owners. Storing thousands of gallons of fuel on your yard or job site makes you a prime target for fuel theft. Theft could come from external outside sources or from inside your organization. Let’s begin by looking at theft from outside your organization. You have to spend a significant amount of money to secure your tank. On your yard, these security measures can be in the form of gates, fences, cameras, or even security guards. On the job site, it’s much more difficult as the location is temporary by nature. The point is that your “Tank” is like a billboard advertising to potential thieves.
Nobody wants to think that their employees would ever steal from them, but the sad fact is that internal employee theft happens every day. In addition to the security measures above, you have to figure out how the account for the fuel being pumped out of your tank. Take theft out of the equation, how do you even tie fuel costs to the appropriate routes or jobs? It’s challenging without management resources and some sort of accounting system. The necessary accounting system just adds even more expenses. Why even tempt an otherwise good employee with idea of stealing from the company.
Chances are, you were probably sold on a bulk fuel tank by highlighting all of the efficiency gains of not having to go to the fuel station. Having your diesel and gasoline delivered directly to your bulk fuel tank seemed like a great way to increase efficiency, right? We would probably agree that it’s a little better than sending your employees to the gas station if you can tolerate the risk mentioned above, but how much better is debatable. You’re still paying your employee to fill your equipment. You will likely still have logistical issues and lines at the pump.
Time is money! Your employees time is better spent making you money rather than sitting waiting and fueling your equipment. The idea is to maximize the time your asset is on the road working. Keeping track of where your fuel is going is a nightmare that someone in your company is going to have to deal with also. All things considered, that bulk fuel tank is like having a bucket with a hole it. When you add it all up, the savings might not be there for you.
WHAT'S YOUR POINT?
Fuel Logic specializes in designing comprehensive fuel solutions that take all of these considerations into account. Direct to Equipment, Card Lock, Fleet Cards, Truck Stops, and Bulk Fuel Storage Tanks. All of these fueling strategies have their place, but you have to understand the True Costs of each and risk vs. reward opportunity. Only then can you make an educated fueling decision. Contact Fuel Logic today and get a handle on your fuel delivery strategy.
The fact of the matter is that bulk fuel storage tanks do have their place, but it’s important that you understand the risk and expenses that are associated with having them on your yard. Many companies don’t understand the “True Cost” of fueling from a bulk fuel tank and believe that they are saving money.
Many companies just do tanks because that’s the way it’s always been done. They don’t understand that there are other alternatives for fuel delivery like Direct to Equipment or Wet Hosing. Wet Hosing fuel delivery eliminates the headaches of owning a tank and the fuel delivery company delivers the diesel directly into your fuel tank.
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