Benefits of Owning Asphalt Oil Storage
Owning asphalt oil tanks allows a paving contractor to have a competitive advantage in material cost, quality and product supply security. A few examples of these advantages include the ability to buy wholesale versus retail, ensure consistent supply, take advantage of annual pricing variations, manage quality, and protect against shortages and outages.
Wholesale Versus Retail Purchases
Buying wholesale invariably is a more cost-effective option for any buyer of asphalt oil. The ability to become a “ratable” customer for any supplier allows them the ability to schedule in advance and allows you to become a consistent outlet allowing you to negotiate better pricing. You can lock in pricing, and you are not subject to the large “rack” pricing variations.
Ensuring Supply by Multiple Sourcing
Having product in the tank, when you need it, is the best insurance policy you can have. Being able to receive asphalt oil by truck, rail or barge from multiple suppliers gives you the leverage to negotiate better pricing and take advantage of the occasional “fire sale” by a refiner.
Take Advantage of Annual Pricing Variations
There are still opportunities to “winter fill” and take advantage of lower pricing in the off season.
When a truck pulls into a retail terminal they get what’s in the pipe that day. Normally it’s on spec, but we all know that specifications have a range, and if you’re working in a tight range there could be an issue. Having your own tank and blending equipment will allow you to control this risk and know that you’re on spec every load.
When you own asphalt blending and modification equipment, you have total control over the quality and consistency of your asphalt binder. You can even produce your own custom, high-quality blends and specialty mixes to differentiate yourself from the competition and ensure you have the right binder for every application.
Protection Against Shortages and Outages
Who hasn’t had the fear of pulling into a terminal and not being able to load because the terminal was out of product. This will never happen to you when you secure your own supply. Refineries have issues, fires, labor issues. Terminals have issues, bad pumps, heat goes out. There will always be a reason to have your own secure storage.
Is an Asphalt Oil Terminal Right for You?
If you’re considering constructing asphalt oil tankage, you will undoubtably hear from your current suppliers that there is already too much shell space, or that pricing won’t be any better, or even veiled threats that you could get cut off. No doubt this would make anyone apprehensive. However, with the amount of road contractors around the country who have built storage in the last few years, there are very few that have not added on to their original construction. This is proof alone that there is an advantage.
The decision to build tankage is a big step, and you’ll want to run the numbers to ensure it makes sense for your operation. ECF can assist in walking you through the capital costs and potential payback calculations that could be realized.
Operating an asphalt oil facility is not as complex as one might think. ECF and its partners have firsthand experience in operating facilities and can explain the operations, expenses, and unique challenges that come with these operations.
If you would like to explore the concept and get some preliminary pricing, ECF can help. We offer a full range of asphalt terminal engineering and design-build services, as well as retrofits and upgrades to existing terminals. We also custom-build asphalt blending and modification systems, including polymer modified asphalt blending skids, in-line multi-stream blending systems and polyphosphoric acid skids.