By Keith Reid
Mobile Force Refueling launched in 2000 with owner Brad Davis, a pickup truck and a 100-gallon fuel tank in the bed. The company now operates 23 fuel trucks and services commercial accounts including construction equipment, trucking fleets, backup generators and a wide array of other diesel-powered equipment in a 60-mile radius, each, around Phoenix and Tucson, Arizona, and now Las Vegas with further expansion plans on the way.
MFR is exactly what its name implies, a commercial fueling operation that devotes its resources to this increasingly active business segment. The company provides on- and off-road diesel fuel, a full line of top-grade petroleum products, all OEM-approved filtration products and a highly experienced staff to facilitate these operations directly to construction projects and fleets. This also includes diesel exhaust fluid (DEF), oil and lubrication service.
The company website states: We understand that your truck fleet is the “Iife blood” of your company and maintaining successful relationships with clients is ours. In speaking with MFR owner Brad Davis, it became clear that the company actually “walks the talk.”
FMN: You really worked your way up from the ground floor.
Davis: I started the company up with a hundred-gallon fuel tank in the back of the pickup truck. The initial thought was to start selling fuel and lube services to that specific contractor-type clientele. So, you know, we bought a couple of fuel tanks and started fueling a couple of little generators, water pumps, small construction machines and stuff like that—guys who had some equipment in the field that was set out that required an employee to go fuel every day. And then we bought our first fuel truck and started canvasing the market for any client that had a need for fuel and lube services.
From 2000 to 2009 the entire focus was solely on the construction sector along with the special event market and the data center world for backup power generators. Then we expanded into the mobile fleet fueling business. Year-over-year we’ve expanded the model, developed high end technology to facilitate data collection and provided a world-class operation all while strengthening our reputation as the leader in the mobile fueling space in the cities we operate in. When you do good work with honest intentions and treat people right, that starts to spread rather quickly.
FMN: Why is mobile fueling so active these days?
Davis: It’s what makes the most effective economic sense. Logistics comes into play because that has a component of economics as well. Sometime around 2008 to 2009, the economics and logistic value of mobile fueling really started coming to the surface. People were trying to figure out how to get “X” amount of freight moved with limited employee resources, and trucks, labor and available truck time, which are the three components that make mobile feeling a dynamic solution today. The cost associated with a guy sitting in his truck or his piece of equipment at a fuel station is the component to evaluate. What does that unit cost, does he have available hours in the day to do it and what are we paying the driver? So as those costs continue to increase year over year, there is not a more cost-effective way to procure fuel than through the mobile application.
We’re able to quantify the margin based upon what we’re able to save the customer. This is not like the wholesale fuel business. In the bulk fuel spectrum of the distributor model, everyone is chasing their piece of the margin. It’s a half a penny deal here, a three-quarter penny deal there. In our space, if the operational cost for a client is 62 cents a gallon to fuel their own truck and MFR can bring it and deliver the fuel directly into their asset for 51 cents a gallon, that has some real margin play to it. So, you could get companies that are doing 50 times the volume that we’re doing, but still aren’t making the bottom line returns that we make. In the wholesale model, if another distributor beats you by a penny, you’ve lost the full load today. In our operation, it is all about service, reliability and reputation to always deliver and keep our clients up and running.
FMN: Are the customers receptive to the value propositions?
Davis: They don’t want to send their guys into a truck stop where they’re paying the driver the burden cost of $45 per hour and the driver is sitting there for 40 minutes in the fueling process. He picks up 30 gallons, and the 40 minutes that he is sitting there costs $30, which increases the cost of the fuel, effectively, by a dollar a gallon. People don’t quite comprehend that until you put it in front of them in dollars and cents. Why am I going to pay you 30 cents more per gallon than the pump? But then they see the true cost and also realize their driver could have been doing two more deliveries that day and the economics start coming clearer into focus.
FMN: You offer your customers oil and lube service. How does that work?
Davis: We have what we call our “oilers.” They go out at night and not only do they fuel the heavy equipment, but they grease and service the equipment to adhere to OEM daily maintenance standards. And if anything needs hydraulic oil or gear oil or motor oil or antifreeze, they’ll top off all those compartments as well. They also perform preventive maintenance (PM) services on all types of construction equipment.
FMN: What is the training challenge with that?
Davis: We work on everything. So, there is technical expertise required, but when you’re just greasing the machine or changing the oil, they’re really all about the same. From a servicing standpoint, a backhoe is a backhoe and our oilers are experienced working on all makes and manufacturers’ equipment. Finding the “right” oiler for a contractor can be extremely challenging, which is why that sector relies on Mobile Force Refueling to provide such services.
FMN: How do you handle your DEF service? Is it a profit center or a value add?
Davis: Distributors in the fuel space often think they must be the cheapest option in the market; however, from our perspective, our clientele is looking for the company that provides them with the best overall solution. When you start dealing with bulk deliveries and you start dealing with totes, you’re having to compete with the other guys doing the same thing and it’s a race to the bottom in that model. DEF, to us, is no different than the fuel business in our model. We feel the mobile space has more economic value than does the bulk option and we’ve developed strategies to excel in the DEF business without having a bulk mindset. Our mobile DEF is a very bright piece for the company today.
Just as with fuel, there is a cost to time. Let’s say the driver parks the truck in the yard, right? He’s got to go somewhere and get jugs of DEF, walk it back to the truck and put it in. The driver has to account for the product and someone in the office has to inventory the product as well. So that’s, say, 15 minutes of time. That 15 minutes just cost $10 and you put three gallons a DEF in at $3.50 a gallon for the labor. And you bought the product in cases, so that cost you roughly $5.50 a gallon, so it’s up to $9 per gallon, total. We’ll come in and charge you $5.50 per gallon and dispense it directly into your fleet with barcode data capture technology recording every piece of the transaction.
We’re delivering 90 gallons here and 60 gallons there and we’re putting it right into the truck. We can track the asset—each has its own dedicated barcode just for DEF. And, we have a dedicated DEF truck. There’s nothing else on those trucks; that’s all he does all day long.
FMN: That’s interesting. A lot of companies incorporate DEF directly into their fueling operations.
Davis: Back in 2013, if I had been CFO of another company when I got to DEF delivery, they would’ve fired me. We built a DEF truck with not a single DEF delivery on the books, but I just knew that DEF was going to come alive as clients started replacing their existing fleets with DEF required power units. At the time, a client might have 40 trucks, but only three of them were needing DEF. It took a while for them to cycle the equipment out and we were losing on that operation for the first 18 months. But now, we have three dedicated DEF trucks that are profitable, and we’ve had people reach out to us inquiring about our DEF service and we ended up earning their fuel business in conjunction with the DEF service.
From our standpoint, running DEF on a fuel truck in a metropolitan area is doing it wrong. We thought about it, yes. The fuel truck holds 4,400 gallons a fuel and it goes back to the terminal three or four times a day. If you have a compartment with 500 or 600 gallons of DEF on there, you’re not going to cycle that DEF three times a day. So, you’re taking up capacity on a very valuable fleet asset and putting a somewhat stagnant product on there. So, for us, it was always dedicated delivery.
Now, I will tell you that we have some DEF tanks on the mobile lube service trucks. Those guys go out there every day, and some of that construction equipment needs DEF every single day.
FMN: Describe your generator service. Are there any challenges with that?
Davis: Well, there’s not a ton of challenges. The client’s biggest concern is reliability. Here in Phoenix we do the backup generator data center fueling for the who’s who of technology firms, I mean, you name it and MFR is their fuel provider. They need the most reliable company as these generators are the last line of defense to keep their global operations up and running. This sector of the business has only one requirement and that is 100 percent service. The price is irrelevant if a truck doesn’t show up and keep their power online. The only challenge we sometimes face is logistics for special events. However, that is worked through with the people on the ground. This is a good piece of business for us, overall.
FMN: You operate a significant fleet yourself. While capital intensive, how important is it to have this delivery capacity?
Davis: We have first-class trucks, first-class equipment, first-class technology and first-class drivers and office people.
Right now, everyone, it seems, is attempting to acquire mobile fueling assets. There are a ton of brokers in this space that don’t own assets. The marketplace is starting to get busier and busier and if you don’t have the assets to physically procure the delivery, you can’t properly serve the client. There are a lot of fuel companies in the U.S. that don’t operate fuel trucks and they simple offer the consolidation services and utilize various fuel companies to create a network to support their model. As time goes on, a company who operates no physical fuel trucks has some real exposure to competition that does have trucks. That makes companies like us, with assets and operations, very valuable in today’s space.
FMN: You’ve touched on employees and service, and quality employees are key to quality service. How do you avoid the labor headaches associated with so many companies today, especially with drivers?
Davis: Well, we do what no one else does—we pay them. You can acquire employees for a lot cheaper than we pay our drivers; however, you are then dealing with the Achilles heel of any operation, which is turnover. Sending five different guys to a delivery site each month is going to cause problems. You’re going to have upset customers; you’re going to have issues with things not getting done right. So, our philosophy is simple. Every dollar per hour increase that you give a driver converts into about $2,700 a year in expense. And, we have figured out that it costs us about $12,000 per employee to hire somebody and train them on our system and get them parked at the terminals.
We would just rather overpay the market five or six dollars an hour and have constant labor, no turnovers and a very good reputation in the marketplace, rather than have a constant revolving door. This is hard work. A driver could go to work for a fuel company at 21 dollars an hour or drive a dump truck at 20 bucks an hour, where you just sit in the cab all day long and drive. Well, guys will go backwards to get 20 bucks an hour and not have to work so hard. So, we create a situation where they’re all very well paid. Our benefits are first-class. There is no question this strategy has a real expense to it; however, from our perspective, it’s got real value in stability of operations.
The “other side” value of that is intangible. We know our method has extreme value; however, I couldn’t put it on paper as intangible values are just that. So, we just decided to pay our people very well. That starts at our office staff and goes all the way through the entire company.
But for that, they must be good. We hold them to an absolute higher standard, and we should. If you talk to anyone who does business with us, they will tell you, the drivers, office staff, sales reps and operations team are simply first-class and that is the way we have conducted business since inception. Succeeding in this space is quite challenging, so for those companies like Mobile Force Refueling, there has to be something that creates a client experience and we do that very well from top to bottom. As a company, we all win together and that is how our compensation plans are designed. That is the MFR difference that clients still do care about. It’s the equipment, it’s the people, it’s the quality that makes us who we are.