In the past couple of decades we’ve seen the market evolve in ways we couldn’t think were possible back then.
We’ve seen apps take the place of brick and mortar stores.
We witnessed the revolutionary Uber era where people can book cabs in seconds instead of waiting in long queues.
And then came cloud-based solutions that are quickly replacing server-based softwares.
And these tech advancements have not only enhanced customer experiences but also enabled business owners to run their business with better processes, much more flexibility and a whole lot of data.
As we reflect on these tech changes and the industry trends in recent years, combined with what we’re likely to see in the next 12 months: all we can say is – change is on the horizon for fuel marketers.
This report – dives into some of the major tech trends that will shape how you manage your business in 2024 and beyond.
Here are the top 12 factors you absolutely must have on your checklist while evaluating softwares:
What 2024 holds for you?
Day-to-day operations will be supercharged with ‘AI’
Artificial intelligence in the energy sector is expected to surge to $19.8 billion by 2031, with a growth rate of 17.4% from 2022 to 2031.
AI is coming at a time of transformation for industries, fuel distributors included. With everything happening in the industry – fuel prices being so volatile, supply chain challenges, competition becoming fiercer than ever, customer expectations of hassle-free experiences – AI is and will continue to play a major role in business growth.
Manual processes and guesswork? Say goodbye to those. Almost every aspect of operations will become AI-driven:
- Predictive maintenance will help prevent costly equipment failure
- Demand Prediction/Forecasting using AI will help companies accurately predict demands for downstream petroleum products. That in turn helps manage inventory, quickly respond to changing market dynamics, optimize resource utilization and maximize profits.
- Route Optimization makes deliveries more cost-efficient with better route planning that maximizes delivery volumes and minimizes time on the road.
- Procurement – Predicting price trends and selecting the right suppliers further optimize procurement
And this is just scratching the surface.
Companies that understand this and put it to use – are the ones going to benefit from the efficiency gains of streamlined fuel distribution.
Making better decisions with ‘Big Data Analytics’
Data is the future – has never been more true. However, data brings endless possibilities with it only if you know how to make sense of it.
The use of big data analytics tools and BI dashboards will only increase from here on to monitor operations in real-time, fine-tune daily processes, prepare for the unknown and easily identify ways to optimize and reduce costs using historical and current data.
“Data is at the forefront of everything we do. The more information you have at your fingertips, the better decisions you’ll be able to make. Leveraging this data correctly can help companies grow tenfold. “
– Alex Salazar, Ex-VP of Operations at 3L Energy Solutions
Leveraging modern dispatch softwares
It’s come as no surprise that in 2024, some of the most impactful tech trends will center around improving operations with cutting-edge dispatch software.
When it comes to tech – the fuel distribution industry has lagged behind in adopting tech when compared to other industries. People have been managing their business on manual processes for decades now and have eventually become comfortable with it.
But while these manual workflows and the dependency on people have been the norm in this industry – they’re no longer efficient. And fuel marketers are realizing that now.
“There are too many moving parts in this industry and we’re trying to cut any and all manual processes. It’s a long term play and we want to set up a good foundation with the right partner because having a good software system is the key to being successful.”
–Trusted on-site fuel delivery company in Tulsa
Even the industry changes like market consolidation are driving up tech investments. 2023 has seen the decade’s biggest acquisitions – Exxon Mobil Corporation acquires Pioneer Natural resources in an all-stock deal valued at $59.5 bn. Chevron buys Hess for $53 bn in stock.
And the era of megadeals in the upstream sector points towards growing market consolidation trends even in the downstream sector.
RelaDyne, one of the largest lubricants distributors partnered with Sun Coast Resources, another leader in fuel, lubricants, DEF and emergency response solutions to expand their distribution footprint.
Another example is Spec Oil – an above-the-rack global commodity trading firm, acquired 3 fuel distributors to form 3L Energy Solutions – a 60+ trucks operation.
But integrating different companies to come together and function as one can go wrong in a dozen ways without the right tech. Imagine dealing with different processes right from the way an order is placed and created, dispatched to customers, billing processes – it can only end in chaos. That’s why technology is in the forefront of M&As – enabling a seamless process that can make operations efficient.
“With the technological advancements happening – it’s very important to adapt. The industry itself is seeing the larger companies acquiring the smaller ones. And those large companies are already equipped with new-age tech. So in times like – to stay competitive and scale your business – you have to adapt to tech. “
–Patrick McNeece, Partner at McNeece Bros
To make M&A’s successful for both companies – tech has become a necessity to ensure that operations remain unbroken.
Need for mobile-based technology for drivers
The American trucking association released their US Freight Forecast for 2024 report where they predict driver shortages to shoot up from about 60,000 in 2023 to 82,000 in 2024.
One of the major reasons is a retiring/aging driver workforce. In fact, there are five times as many older drivers as younger drivers. On top of that – the younger generation is resistant to taking up driver jobs simply because of the demanding nature of the job. The long hours on road, unpredictable schedules – make it hard to hire and retain new drivers. This creates a challenging position for fuel marketers to be in.
We see mobile-based technologies playing a very crucial role in hiring and retaining drivers. Making distribution easy and efficient will go a long way in keeping drivers and even getting more deliveries done with lesser resources.
“Everything is drilled down for drivers so they don’t have to think about anything. It takes all the guesswork out and prevents drivers from making mistakes. It’s like giving them the easiest day we can.”
–One of the oldest fuel and lubricants delivery serving the industry for more than 20 years
With mobile-based technologies delivery information and tickets don’t have to change hands. Driver’s don’t have to go back and forth with a bunch of papertickets. There’s a lot more flexibility in responding to changing schedules with up-to-the-minute updates provided to drivers.
Even getting new drivers trained on tech becomes a lot more easy. They have their smartphones, they hit download on an app – and they get step-by-step instructions for completing their orders – making it easy for drivers to manage their daily loads.
Ditching server-based tech for cloud-based solutions
The downfall of server-based technologies has been long awaited. And it’s here now.
Software has evolved a lot – making it easy for businesses to access it anytime, anywhere and on any device. Fuel Marketers are able to save up a lot on the implementation and maintenance costs that generally touch millions of dollars for server-based systems.
The fact that operations teams can manage their entire operations over a browser/mobile-app is really changing the way fuel marketers handle their operations. With tight budgets and the drive for higher efficiency – cloud-based systems are going to be critical for businesses in 2024 and beyond.
Implementing Integrated and Unified Systems
“There is a lot of stuff happening out in the field. Information is scattered in different places and you want to consolidate them all in one place so that reconciliation becomes easy. With legacy systems like PDI, data is so fragmented – it’s difficult to bill a customer without retrieving data from 10 different places and piece it together.”
–Patrick McNeece, Partner at McNeece Bros
Back-office systems are making waves for most companies. While a lot of fuel distributors may have slugged with paper-based systems, a lot of them are already using some kind of rugged software. And they are now looking to upgrade.
While that does mean significant investment, they’re also good paybacks in terms of efficiency. And as companies upgrade their back-office and accounting systems – they simultaneously look at upgrading their dispatch tools and prefer a software that can integrate with their other systems and also support business as it scales.
And because companies have a lot of growth opportunities (like expanding their geographic reach, adding new business lines) – the need for a unified system that can manage all their business lines in one place rather than having 10 systems that don’t play well together, is pretty evident.
Owning customer experience with tech
Right from placing an order through delivery and final invoicing – operations processes influence every aspect of customer experience.
Customer portals – where customers are able to place and track orders directly without having to dial a phone number everytime they want a status update are becoming a must-have.
The entire delivery experience – customers get instant notifications on order delivery, get their invoices (accurate ones) as soon as the order is delivered – significantly improves customer satisfaction.
In the face of competition, fuel marketers need to focus on customer experience in their 2024 strategy to stand-out and gain loyal customers.
“We offer the same service and sell pretty much the same products as our competitors do. You know, we sell fuel, they sell. The question becomes, how can we provide a better service to our customers that makes us stand out for the pack? Offering technologically based solutions is a good way for us to stand out in the marketplace.”
–Alex Salazar, Ex – VP Operations at 3L Energy Solutions
What do all these trends mean for fuel marketers?
Adapt or die. That’s really what 2024 will be all about.
It isn’t enough to just find workarounds for broken and disconnected operation processes and hope it will uphold your business and allow you to scale.
It’s important to embrace these latest trends. Only by doing so can you scale and grow your business with ease, tackle industry challenges and remain agile and competitive in a dynamic industry.
And the key to success is not just navigating change but leading it. And the right tech partner will help you be that leader.