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From its Romulus, Mich., headquarters, RKA Petroleum Cos. Inc. is aggressively going after more business as it bets on the future health of commercial fleet accounts, many of which are badly battered from the nation's recession.
RKA supplies approximately 300 million gallons of unbranded and branded fuels, including CITGO, Marathon, Spirit and Sunoco, to retail, commercial and industrial accounts across 24 states and Ontario, Canada. The company is looking to increase that volume by pouring resources into its commercial accounts and fleet-fueling business, which already includes trucking companies, grocery fleets, car rental fleets and private carriers. RKA operates a fleet of trucks in Michigan, Ohio and Florida 24 hours a day.
In October 2009, RKA hired national accounts director, Scott Steiner, to help boost its existing industrial and commercial customers' volumes, and bring on new commercial clients. "This is the time many companies need solutions that will drive down costs and provide dependable service and surety of supply," said President Rick Enright. "We recognize numerous opportunities for us [in this economy]."
RKA is well-positioned to grow the volumes purchased by its existing commercial accounts, while obtaining new fleet accounts, Enright said. "We are working with our customers to develop and provide renewable fuels and risk management, and technology solutions to help drive out unnecessary supply-chain costs," he explained. "Our goal is to become a national provider of fuel and a one-stop-shop for our customers."
Steiner aims to help customers become more efficient fuel buyers and better manage their price risk. RKA is able to manage a company's entire fueling process, providing equipment or tying into existing equipment to monitor inventory and do the ordering.
Many of RKA's customers take advantage of some level of the company's inventory management service. "These commercial accounts don't want their own people spending time and money monitoring fuel orders when we can handle it remotely and deliver more gallons per delivery, which saves money," he said.
To remain competitive, the petroleum marketer developed other services, such risk management programs for companies having difficulty dealing with budget-busting gasoline or diesel price volatility. As the economy faltered, RKA's willingness to work on credit management with accounts has been key to keeping customers, Steiner said.
"Our credit department spends a great deal of time with customers to understand their exposure and properly manage it," he said. "As these accounts' miles grow, our business will grow."
On another front, the company is developing an enhanced fleet-fueling program to offer a service that brings fuel to retail and commercial customers' fleets. Fuel will be delivered to customers' trucks, equipment or generators, rather than having clients' drivers spend time at the pump. RKA will fill customers' trucks, generators or any other Department of Environmental Quality-certified storage unit at the customer's site, preferred date and time. Only trucks and other assets with an RKA-provided barcode will be filled, giving the customer more control over fuel purchases.
RKA will use wireless hand-held technology to capture electronic signature and other data from each delivery. Also, each delivery truck's meter and GPS system will provide verification and time-sensitive information about each delivery. The petroleum marketer will e-mail reports that include asset information, fuel use, odometer readings and other information to each fleet-fueling customer.
"RKA offers various technology services and solutions that are not standard in our industry," noted Jason Hittleman, the company's director of information systems. "We are rolling out several new offerings in 2010 including this fleet fueling technology and an improved inventory management solution."
Along with these initiatives, RKA is touting its long-time strengths, including competitive pricing, solid customer relationships and BQ-9000 marketer certification by the National Biodiesel Accreditation Program.
Some of RKA's fleet customers buy on-the-spot market, while others bid out specific locations. RKA offers these customers contract pricing using industry indexes such as NYMEX, Platt's and OPIS.
"We operate in very competitive environments so our business will fluctuate greatly," said Keith Albertie, executive vice president. But we have the knowledge and capability to manage this market volatility."
To smooth out some of the peaks and valleys, RKA is working to hold onto existing customers and build their volumes. "To stay in the mix, we have to manage those relationships more closely," Steiner said. "Some customers value that effort more than others. But our team is very experienced and understand what our customers' problems are -- and work to come up with solutions for them."