The energy business is hot again, but that’s not news to Western Refining Wholesale. The company, which operates throughout the Southwest, has been in the process of expanding its operations while keeping true to its tradition of customer service, according to Jared Hanis, manager of procurement and field services for Western Refining Wholesale, which is headquartered in El Paso, Texas.
Since joining the company in February 2014, Hanis and his team have been focused on making the fleet more efficient and cost effective.
“We have changed a lot of the processes of how we do things,” Hanis noted. “After a thorough evaluation of our operations, we concluded that, with these changes, we could operate more cost effectively than we could under a full service lease.”
Bringing Maintenance In-House
And, the numbers at just one location showed why this move to in-house maintenance made financial sense.
“At our Phoenix location we determined that by servicing in our own shop, we could generate substantial annual savings,” Hanis explained. “In certain areas where it makes sense to run a full-service lease, we will do it, particularly in areas where we don’t have the mechanical support.”
Maintenance is handled through the company’s internal total maintenance track (TMT) program, which is administered by Kristen Signor, asset maintenance administrator.
The system, which follows the entire maintenance path, has its roots in curbing unnecessary recurring maintenance costs.
“For instance, while still regularly checking trucks’ tire tread depth, we found that we were getting charged numerous miscellaneous fees,” Signor said.
Now, the fleet stocks its own tires and has its own mechanics handle maintaining them. “It saves all sorts in costs,” she noted.
The TMT system is geared to having repairs done internally. The mechanic logs the repair into the system and charges it to the truck.
“That’s how we manage the costs of repairs,” she explained.
If one of Western Refining Wholesale’s mechanics can’t handle the repair, Signor will call the vendor and have it handled through that company.
To help rein in costs, Signor said, Western Refining Wholesale has developed a list of preferred vendors. The system is used across the entire fleet and all of the regions it operates.
“It’s uniform across all of the terminals,” Signor said.
Going to the Source
Another innovation Western Refining Wholesale has implemented since taking over the fleet is direct sourcing of equipment.
“When we buy trucks, we have to go through dealers, but on the trailer side we go directly to the manufacturer to get the best pricing,” Hanis said. “Typically, when you do that you can achieve cost savings.”
Hanis noted another challenge was the way sourcing was being handled in many cases.
“We were simply going to a dealer and buying a product for the best price we could,” he said. “We put processes in place and went straight to the manufacturer.”
This allowed the company to direct its purchases to the manufacturers offering the best incentives and warranties.
“We achieved our business objectives and the satisfaction of both managers and drivers,” Hanis said.
Handling Fleet In-House
The company manages the geographically dispersed fleet on its own without the help of a fleet management company (FMC).
“Everything a fleet management company offers, we can do in-house. We track our mileage and our fuel with our own fuel card, and for maintenance we use our TMT system. It’s all the nuts and bolts an FMC would offer,” Hanis said.
While FMCs offer a number of advantages for fleets, Western Refining Wholesale had already realized many of these advantages on its own, according to Norman Nielsen, senior treasury analyst for Western Refining Wholesale.
“We have very good software installed in our power units that allow us to monitor, analyze, and transmit critical performance metrics real-time to our servers and subsequently to management,” Nielsen said. “And, we are developing the reporting format needed to analyze and compare equipment performance and usage needed to project equipment replacements.”
The second advantage of running its own fleet is tied to the bottom line.
Nielsen noted the company has good relationships with its financial institutions, which helps the company obtain very competitive financing.
“Having a base of solid financial institutions with an expertise in leasing is important,” Nielsen said. “A critical component to a successful lessor relationship is to provide them with accurate estimates for equipment requirements for their internal planning. Finally, financial institutions have internal approval processes just like we do, so proper planning is a must for both sides.”
Again, the benefit of these strong long-term relationships has been to the bottom line and operational efficiency.
Fueling the Fleet
One of the unique aspects of Western Refining Wholesale is that it offers its own fuel card, the Firebird Fuel Card, which Hanis uses enthusiastically.
“This is a great product, not only for us, but for any truck fleet operator. There’s no fee for the card, and you get the same reporting as you would with other fleet fee-based fuel cards,” Hanis said. “Western offers competitive pricing per gallon. We don’t have pricing on our pumps. The bill goes straight to the companies so they see what they are paying per tractor, per driver.”
The Firebird card is part of the CFN Fueling Network, which allows the card to be used at any CFN or Fuelman location.
While the pricing is competitive, the Firebird system gives fleet administrators and managers the ability to track each fueling transaction as they occur.
“Our sites have digital cameras, and the video can be pulled up and you can see who, when, and how a truck was fueled,” said Sandy Scherwenka, Firebird sales manager.
Cards can be set up with a multiple, floating PIN option. There is no limit. The fleet can load all employee PINs in the system and use any unit’s card. It will track the person and unit utilizing the Firebird Fuel Card.
The system also comes with live support if there are any issues or questions that need to be asked.
Keeping the Fleet on the Road
Coincidental with Hanis’ redoubled efforts to make Western Refining Wholesale’s fleet even more efficient, Linda Sabori, regulatory specialist, was gearing up to renew the fleet for its consolidated interstate licensing renewals.
Sabori’s role is simple. “I make sure we keep the trucks running on the road,” she said.
Sabori handles permits and renewals, and tracks the impact of new laws.
MVRs and other driver’s licensing issues are handled by HR.
Western Refining Wholesale’s Expanding Fleet
Western Refining Wholesale operates about 500 vehicles currently, of which 350 are under Hanis’ direct management.
The heavy-duty trucks are used in a number of functions related to transporting fuel and lube products. In addition to tankers, the company also operates flat bed and box trailers.
Western Refining Wholesale does business in Arizona, New Mexico, California, Nevada, and Texas.
The next chapter for Western Refining Wholesale’s fleet will be building on the efficiencies already gained over the last year or so.
Hanis will also be implementing a three- to four-year/480,000 mile replacement cycle for the trucks.
Ultimately, though, with plans for further growth, the theme for the next year and beyond for Western Refining Wholesale will be the same: keeping things in-house.
“What next year holds is more standardized processes — getting more control,” Hanis said.