With automated deliveries and scheduled pre-buys, getting the propane you need seems more effortless than ever. For end users, it really is that easy. But for propane suppliers facing winter cold snaps and global supply demands, planning can be a more complex process, beginning as much as a year before deliveries reach propane consumers. For those of you who have wondered how the right amount of propane gets exactly where it’s needed, let’s break down the process.
How it works
Propane supply planning is all about alignment – from the supplier to the dealer and finally to the end user. Typically, the process starts early in the new calendar year, with suppliers building a rough outline of the propane needs for the coming year. Suppliers work closely with their marketers to forecast needs for the next supply year based on the following factors:
- Supply resources: Establish which regional terminals will serve as primary and secondary supply points to best serve the marketers customer base.
- Demand ratios: Identify the marketer demand ratios based on customer use and time of the year. This allows supplier and marketers to balance demand with resources.
- Market influencers: In a global marketplace, exports will have a greater impact on overall supply inventories. Price spread between the U.S. market place and foreign markets will require suppliers and marketers to closely watch exports as an influence on propane inventory. With this influence the supplier will determine the best source for the propane dealer and ultimately your needs.
Equally as important as supply is making sure propane is available where it’s needed. After assessing supply, the next step in the process is having account managers reach out to customers to gauge supply requirements for the coming year. Knowing what each customer needs is a key component in fine-tuning the plan and determining where propane should be stored.
What does this mean for you?
Propane supply planning is truly a partnership. End users play a vital role in ensuring supply demands are met in their local areas. Contact your propane dealer to describe your anticipated propane needs. Many local propane dealers offer incentive packages for users who want to forward contract or even apply for early-fill programs.
CHS is committed to supplying customers with the safe and reliable propane deliveries they need throughout the year. If you have questions or want to discuss your propane supply, get in touch with your local propane dealer.
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