In the Know: Propane tank supply stabilizes

In the Know is a monthly partnership between LP Gas and Propane Resources. This month, Obie Dixon discusses the current state of the propane tank market.

Tank supply has stabilized since the onset of the COVID-19 pandemic. (Photo by LP Gas staff)

QUESTION: What is the current state of the tank market?

ANSWER: We are always naming events to add to the history books. Outside of the World Wars, there was the Spanish Flu, the Great Depression, the Dust Bowl, and then, of course, the COVID-19 pandemic.

What makes the COVID-19 pandemic unique is that we all lived it, and those of us in the propane world dealt with it on many fronts. Some were trying to keep offices open, sustain staffing and deal with the consequences of supply chain breakdowns. These challenges became front and center when trying to purchase tanks, maintain fleets and stock service supplies. Each issue could become a single discussion topic in and of itself.

Let’s look at the issue of getting tanks. Economics centers around supply and demand. About three months into the pandemic, the demand for tanks was starting to tick upward, and at the same time, the supply was dwindling. The immediate supply of tanks was trending downward, and the manufacturers were beginning to have issues getting raw materials, mainly steel. The perfect storm had arrived.

Tanks became a precious commodity. Not only was supply minimal, but prices skyrocketed. Even if you could afford to purchase tanks, it didn’t mean you could get them quickly. Pre-pandemic, you could order a truckload of tanks and receive those tanks in about a 30- to 45-day time frame. Sometimes, you could get them sooner and sometimes a little later, but at the end of the day, you were confident you could get your needed tanks quickly.

We are still seeing some lingering effects, but over the past year, tank prices have eased, and availability appears to have stabilized.

Nevertheless, let’s prepare for whatever is next.

Treat your tank inventory just like your gas inventory. It’s always a good idea to project how many tanks in each size you may need in a year. Before the pandemic, ordering a single tank or a few tanks without ordering a whole truckload wasn’t too tricky. That may not be as easy today, depending on your supplier. Purchasing a full load of tanks may not be financially feasible for your situation. Research your suppliers and ensure you work with one that fits your needs.

One positive aspect of the chaos of the pandemic is that there are a few new tank manufacturers in the marketplace, giving you more purchasing options.

“Be prepared” is the Boy Scout motto. Even the best of the Boy Scouts in us didn’t see the pandemic coming, but as we look back, there are things we could have done differently to ease the pain. While predicting the next “named event” would be next to impossible, it is not impossible to become prepared.

Obie Dixon is the director of special projects for Propane Resources. He can be reached at 913-262-8345 or obie@propaneresources.com.