Maximizing tank portfolio efficiency: How technology transforms propane asset management

Managing a portfolio of tanks is both an investment and a challenge.

A typical 500-gallon propane tank costs between $2,500 and $3,000 to install in a customer’s backyard when you include regulators, gauges, valves, monitors, lines and labor. With such a significant upfront cost, it’s essential to maximize the efficiency and profitability of each tank.

One way to think about tanks is to view them as a portfolio of income-producing assets. Each tank has the potential to deliver revenue for many years, if not decades, but ensuring that tanks are fully utilized and operating at peak efficiency requires active management. Historically, managing tanks has been labor-intensive, relying on manual data collection and often leading to inefficiencies. Not anymore.

Leveraging technology for tank portfolio management

Technology has transformed how propane marketers manage tanks, allowing for more streamlined operations, greater visibility and a stronger bottom line. Here are just a few examples:

• Tank utilization. One of the most significant advantages of propane management software is its ability to track each tank and monitor as a specific asset. Every tank can be assigned to a customer location or kept at a company plant for future use. Propane marketers now can see, in real time, whether tanks are in a customer’s backyard where they can actively generate income. Equally as important, marketers can better track their tank inventory available for installation and forecast when they’ll need additional tanks.
• Tank status. We use software to carefully track a tank’s condition. Our delivery team completes a simple digital ticket when they make a delivery, noting whether the tank is level, or requires power washing, painting or even sandblasting. We also monitor regulator age and condition. These steps, performed as part of the delivery process, may be used to more efficiently manage tank maintenance and regulator replacement during our slow summer season.
• Tank efficiency. Marketers also may use software to track both income and expenses on a granular, tank-by-tank basis. This capability is particularly useful for tracking costs related to installation, maintenance and repairs. This level of financial tracking helps identify opportunities to improve efficiency. For example, if one tank consistently incurs higher maintenance costs, it may be worth investigating whether the tank needs to be replaced or if the installation location requires adjustments.
• Tank documentation. Software may be used to reduce clerical errors and ensure proper documentation. Basic and complex reports available in our software enable us to confirm that all of our tanks are covered by a signed customer agreement. We also use the software to maintain extensive photographs of the tanks at each customer location. This documentation leads to better informed, more efficient conversations with our customer service representatives when working with customers.
• Compliance and risk management. The integration of tank monitors into our software helps us identify problems more quickly. Sudden drops in tank levels may indicate a leak or malfunction in the tank’s components. Some monitor and software integrations also flag sudden increases in tank levels that are not associated with a delivery ticket. This is important to us in our customer-owned tank business because we require customers who own their tanks to do business with us on an auto-fill basis.

The integration of technology to manage tank portfolios is no longer a luxury – it’s a necessity.

By using advanced software to track tank utilization, manage income and expenses, and automate customer interactions, propane marketers can significantly improve the efficiency and profitability of their operations. These tools not only help marketers achieve their return targets, but also create a more seamless, proactive service experience for customers.

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Christopher Caywood is a co-owner of Caywood Propane Gas Inc. Contact him at chris@caywoodpropane.com.

Featured homepage photo by LP Gas staff