Colonial Group Competition
Now Viewing Colonial Group's competition in: Petroleum Wholesale Distribution (primary)
Recent Developments
Vehicle Demand Not Crashing Soon - Though high gas prices have impacted demand for transportation fuels in recent months, recent reports suggest that gas will remain the predominant fuel for the future. According to consulting firm Accenture, biofuels face previously unforeseen difficulties in the pursuit to replace gas. Industry experts note that while many alternative fuel technologies are in the pipeline, none will replace gas any time soon, ensuring petroleum distributors of steady future demand.
Hurricane Preparations, Reactions Tested - A burst of hurricane activity in the Gulf of Mexico in late summer 2008 tested disaster plans of petroleum distributors. When preparing for a major storm, distributors may need to increase the number of employees temporarily, ensure that any gas stations they own can run on alternative power sources, and step up supply and delivery schedules prior to the storm's impact. Distributors must also deal with post-storm supply issues: 12 refineries temporarily closed during Hurricane Gustav, 14 during Hurricane Ike.
High Prices Prompt Collective Actions - High fuel prices are forcing several cities in Massachusetts to work together to buy fuel. The system will allow petroleum distributors to submit competitive bids for multiple city fuel supplies; the cities hope that buying together will reduce overall fuel costs. If the process is successful, other areas around the country may pursue similar strategies.
Competitive Landscape
Demand for petroleum comes mainly from auto and truck use and home heating. Profitability is determined by the spread between purchase price and selling price and on the volume of product. Most companies are local and operate a single "bulk station" (tank farm), although the large companies may operate a dozen facilities and serve several states. There are economies of scale because large wholesale purchasers generally can negotiate bigger price discounts from suppliers, and because the fixed cost of bulk holding facilities can be spread over a larger number of gallons.
Petroleum Wholesale Distribution Industry Forecast
from Hoover's/D&B subsidiary First Research
Domestic demand for US petroleum production, a driver of petroleum distribution, is forecast to decrease at an annual compounded rate of 3 percent between 2007 and 2012.
Petroleum Demand Growth Volatile
First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.
First Research Opportunity Rating
The First Research Opportunity Rating is First Research's estimate of industry performance vs. industry risk over the next 12 to 24 months.
- Demand: Driven by high energy prices
- Need careful inventory management
- Risk: Slower economy cuts energy use
Industries Where Colonial Group Competes
- Energy & Utilities
- Oil & Gas Refining, Marketing & Distribution
- Petroleum Bulk Stations & Terminals (primary)
- Petroleum & Petroleum Products Wholesalers
- Oil & Gas Refining, Marketing & Distribution
- Retail
- Gasoline Retailers
