Sam Simon will never forget the phone call. Like most everyone in the Midwest, he was monitoring the progress of Hurricane Sandy as it moved up the East Coast in late October 2012, but he wasn’t giving it any serious thought.
The Category 3 hurricane — with winds up to 130 mph — was expected to move inland from New Jersey and New York before losing strength in Pennsylvania, Virginia, and Ohio. The storm, which eventually caused $65 billion in property damage — destroying power lines, along with thousands of homes, offices, stores, and vehicles — proved to be the second costliest storm in the Atlantic United States, according to the National Hurricane Center (in 2005, Hurricane Katrina caused $108 billion in property damage).
As Sandy approached the East Coast, Simon was putting the finishing touches on a new corporate office in downtown Birmingham. His fuel service business, Atlas Oil Co. in Taylor, was delivering gasoline and diesel fuel across 26 states. He also was preparing to launch a new line of service stations, while ramping up distribution of crude oil.
His parents, escaping persecution in Iraq, arrived in metro Detroit in 1973. Simon’s father, Ramzi, found work in a gas station and bought the operation within two years. From there, the company grew to 30 service stations, which Simon began to manage in 1980 while he was still a junior in high school. Five years later, he acquired a fuel truck for $30,000, using a cash advance from a credit card, and launched Atlas Oil. Today, the company distributes 800 million gallons of fuel annually, with 2 billion in long-term contracts, to end users such as BP, Marathon, Clark, and Valero.
“So here comes Hurricane Sandy, and I get a call from a company with a contract with FEMA (Federal Emergency Management Agency), and could we help with supplying trucks and fuel to some of the hardest-hit areas?” says Simon, chairman and CEO of Atlas Oil. “So we assemble 80 of our team members and we send 65 fuel trucks to New Jersey.
“Then we find out we’re managing a network of 368 trucks, so we set up a supply line and (bring) in RVs so our drivers and our operational personnel (can) spend the night, which turned into weeks. It was a logistical nightmare at first, but it became abundantly clear that proper planning would have alleviated a lot of the early confusion. And that’s when I saw opportunity.”
For several years, Atlas Oil, which in 2013 generated $1.9 billion in revenue, has offered emergency services to an array of customers around the country, including data centers, hospitals, corporate headquarters, cell towers, and energy plants. But it wasn’t until Hurricane Sandy that the company’s Emergency Fueling Solutions division began to grow in earnest.
“Our goal is to be the largest provider of emergency services in the country, whether it’s hurricanes, tornadoes, ice storms, or blackouts,” says Bob Kenyon, executive vice president of sales and business development at Atlas Oil. “That means we support first responders and mission-critical businesses that need fuel, generators, trucks, trailers, portable storage tanks, and mobile command centers.”
To get there, the company plans to hire up to 50 people over the next three years, while adding dozens of pieces of equipment. At the same time, the company is strengthening its supply chains and offering disaster-consulting services. Mock disaster drills and continuous driver training are conducted, as well.
“It’s like running an army,” Simon says. “We’re going to have crazy weather, that’s a given. But most people think it will never happen to them. What we learned from Sandy is that smartphones are so important. People have to get to work. But with Sandy, the gas stations and the fuel terminals were shut down, and few businesses had backup fuel to operate a generator.
“And when I say backup fuel, preferably it’s in a well-protected area or in a storage tank buried in the ground. People need water, they need food, they need batteries for their phones, they need blankets, and many other things. At that time, it’s about offense — but you need the defense, which includes planning so you’re prepared for the worst. What’s your backup plan to your backup plan?”
To drive home the point, Simon says Atlas Oil’s Taylor distribution center has a 750-kilowatt generator that can power the entire facility. During a blackout, Atlas Oil can fuel its trucks and deliver fuel and services to National Guard units, police, fire, and emergency vehicles, along with critical operations such as hospitals and data centers.
Atlas Oil delivers gasoline and diesel to more than 400 service stations, but to overcome rising fuel efficiency and fewer miles driven, the company has started to offer education and training services in a bid to increase overall revenue. Called Atlas University, service station owners and their staff learn how to run a more efficient and reliable operation.
The Next Big Thing
While other distributors are content to supply fuel, Atlas Oil provides its end users with the latest information on merchandising, lighting, landscaping, staffing, technology, and customer service. There are promotions where customers can win a Chevrolet Camaro, and work is under way on an app where fuel can be purchased via a smartphone rather than with a credit card.
What’s more, Atlas Oil’s Retailer Program Guide offers tips on moving high-margin goods inside service stations, driving additional credit card usage while limiting fees, and boosting customer loyalty programs. The company also connects service station owners with key suppliers in the car wash, branded food, and retailing industries.
In the last year, Atlas Oil unveiled a convenience store concept called Earth Market. Initially set up in greater Chicago, the stores feature merchandise as well as a café market reminiscent of a corporate aircraft lounge with oversized leather chairs, TVs, a fireplace, and Wi-Fi access. There’s even an in-house brand of coffee called Eco-Earth Coffee.
At the same time, Atlas Oil has migrated from its bread-and-butter service station business to distribute gasoline, diesel, crude oil, ethanol, and biodiesel to and from oil rigs, fracking sites, refiners, and distribution centers. The transloading business includes moving crude oil from a well to storage tanks, pipelines, rail distribution centers, and shipping operations.
“Where we were downstream by providing fuel to service stations, now we’re moving into the midstream part of the industry,” Simon says. “Where there’s fracking going on, we’re providing the fuel to get more of the natural gas from rock crevices and underground pockets that can’t be reached by conventional drilling. We plan to move 950,000 barrels of crude oil in the first quarter alone.”
To get there, Simon is adding trucks — the company’s fleet totals more than 140 fuel tankers — while hiring and training more workers.
In addition, the expanding fleet means Atlas Oil is better equipped to limit the potential for chaos following a disaster. For several years, the fuel distributor’s emergency preparation services ensured that customers had access to fuel so its operations weren’t impacted by a blackout.
For example, during the 2003 blackout across metro Detroit, Oakwood Healthcare in Dearborn lost power at all four of its hospitals. One hospital saw the blackout blow out a controlling switchboard for its backup generators, while another facility had to bring in volunteers to monitor the inpatient mental health unit because the electric entrance doors weren’t working.
With fuel supply agreements now in place, Oakwood is much better prepared for an emergency like a blackout. “We’re confident we can deliver fuel in almost any situation, but it’s important that businesses have suppliers that can get fuel from a variety of sources in times of stress,” Kenyon says. “If you only have three days’ supply of gas for a generator, you could be in big trouble.”
During a hurricane or a tornado, residents and businesses hunker down and weather the storm or retreat to safer quarters. However, Kenyon says most people don’t consider what life is like following a natural disaster. Stores need to reopen as quickly as possible to service customers.
“The best position to be in is that your business reopens immediately following a storm, with no interruption of power,” Kenyon says. “That business is not only going to survive, but (it’s going to) thrive because they’ll have lots of customers coming their way. That type of confidence can last for a lifetime, and beyond. If the local hardware store opens after a storm and is able to serve its customers, well, you’re going to have the most loyal customer base in the world for years to come.”
Eddie Osman, co-owner of Wixom Stop & Go, a service station at I-96 and Wixom Road, says Atlas Oil goes above and beyond what has been a 22-year distribution partnership.
“Atlas Oil is always encouraging us to sell more fuel, because if we sell more fuel, everyone wins because Atlas Oil can buy ever larger volumes at a lower cost,” Osman says.
“They help in so many ways. When I was raising money to help the family of a police officer killed in the line of duty (West Bloomfield Officer Patrick O’Rourke was shot and killed in 2012 while responding to a domestic dispute), Atlas Oil really helped out in organizing the fundraiser. We were able to raise $12,207 as part of our annual Customer Service Day. I can’t say enough about Sam Simon and his team.”
As Simon launches the business in multiple directions to transcend a slow, but steady, drop in demand for traditional fuel like gasoline, he keeps excuses out of the equation. During the 2008 global financial crisis, he recalls a situation where an employee wondered out loud how the company could grow in the face of bankruptcies, massive layoffs, and a sharp decline in auto sales.
“I don’t want to hear a darn thing about the Michigan economy or the global recession,” Simon says. “We are going to grow, no matter what. If you don’t want to grow, then you shouldn’t be on our team.” db