The Ledger - 9 / 4 / 96

Fleetwing's Strategy Brings Success In Tough Industry
Trucking The Lifeblood of Trucks

 

LAKELAND -- In the 1970s, when the Arab oil embargo had many gas pumps running dry, Walter Smith's Fleetwing Corporation was still delivering to commercial clients and cars lined up for blocks to reach his retail station on Combee Road.

Smith's survival tactics in those perilous times are still the foundation of the business: giving priority to loyal clients, a keen sense of the oil market and just a little bit of luck.

"I think being a native Lakelander, he tried his best to take care of people in the area," said Elizabeth Smith, Walter Smith's widow and executive vice president of Fleetwing.

Walter Smith died in 1989, but his protege, David Ricketts, was already primed to take his place.

"I think our decision to keep the business was that Dave was in place and I could trust him exclusively," Smith said. "At that time, he was Wally's right-hand man."

Ricketts, 40, is president of Fleetwing. A Lake Wales native, he started working for Smith in 1979 after graduating from the University of Florida with a degree in business management.

Smith believed in learning the industry from the ground up and Ricketts' early days were rougher than the classroom.

"I started in the shop changing tires and painting tanks," Ricketts said, laughing.

Two of Smith's three children, Andy Smith and Natalie Smith, are also involved in the company.

Fleetwing Corporation was founded in 1958 in Bartow when Walter Smith bought C. Wilson Oil Co., a Sinclair Oil distributorship. He changed the name to Fleetwing when he moved the business to Lakeland in 1965.

The company sits on a 25-acre former phosphate site, and includes offIces, a maintenance shop and 20,000 square feet of warehouse space.

Fleetwing also rents out some of its open space to two trucking companies that store vehicles there.

Fleetwing distributes lubricants and fuels from about 10 different vendors to mainly commercial and industrial customers.

There are also five Fleetwing convenience stores, three of which are company-owned and operated.

"Walter wanted to become an independent distributor," Smith said. "He saw what major oil companies were doing to agents. He wanted more and he really was a visionary."

Twenty years ago Fleetwing had two sales people and a meager offfice staff. The company now has about 65 employees, including a sales staff of 10 and a very low turnover rate. Smith and Ricketts attribute employee longevity to a close-knit atmosphere and the company's benefits.

Most Fleetwing employees are eligible for a profit sharing plan, an annual bonus and insurance.

Ricketts said aggressive sales have helped more than double volume and sales in the past five years.

Fleetwing's primary market radiates out about 150 miles from Lakeland, but the company has the capacity to deliver statewide.

Fleetwing is a multi-branded distributor for products from about 10 different vendors, including Chevron, Mobil, Exxon and Final

It is now one of the top 25 distributors for four of the country's major oil companies, Ricketts said.

Until the late 1980s, Fleetwing was also in the home heating oil business. But a decline in the number of homes using that product prompted the company to abandon that part of the business.

Now Fleetwing's wholesale customers include some of Polk County's largest fleets, like Publix, Comcar and Oakley

Transport, all of which buy lubricant products from Fleetwing.

Fleetwing also services phosphate and citrus fleets other than Oakley, as well as retail service stations and car dealerships.

Providing customers with a steady supply of fuel at a competitive price can cut into profits, especially in a volatile market.

Fuel costs are constantly fluctuating and Fleetwing has purchasing agents negotiating deals throughout the day, Ricketts said. Prices for lubricants, like engine oil, are negotiated differently.

Despite the constant dickering over price, the cost of the raw material doesn't have that much effect on profit, Ricketts said.

"It's a very competitive business. A quarter of a cent can make or break a deal," Ricketts said. "We spot buy every day."

Stockpiling is about the only way to find a windfall in the wholesale fuel business, Ricketts said. But it can backfire. A company that stockpiles fuel at a lower price in hopes it will go up could lose money if the market goes the other way. Fleetwing does not stockpile.

Even the market's reaction to this weekis events in Iraq are not expected to have much impact on wholesalers, Ricketts said.

Tight competition will prohibit passing much of the costs along initially to retailers, who react much more slowly to market changes at the pump, Ricketts said.

Walter Smith knew diversity would be the key to success in his business and in 1975 he started offering laboratory services as a trouble shooting device.

The lab tests oil, transmission fluid and coolant; and can detect system breakdowns by what's picked up in the different mediums.

Eustice Lowe, the lab analysis manager, said he runs about 1,100 tests each month.

Although the lab is open to the public, most customers are commercial and industrial, Lowe said. Fleetwing also uses the lab for quality control of its vendors' products.

As competition tightens its grip on distributors, Smith and Ricketts said there are no plans to go public or accept any of the buyout offers that periodically come their way.

"Our plans call for about 10 percent growth annually," Ricketts said. "Our direct focus is on the commercial-industrial end of our business."

Some of that growth will come from picking up customers from competitors that go out of business.

"It's not a growth industry," said David Morehead, vice president of communications for the Petroleum Marketers Association of America. "It's getting tougher and tougher. You don't make much money selling gasoline. Most people are starting to diversify."

Wholesalers and retailers are both feeling an environmental pinch.

New guidelines for underground storage tanks go into effect in less than two years and Morehead said the tougher rules will force some companies out of business.

Ricketts said Fleetwing has already picked up some new clients from competitors who were forced out either due to the expense or lack of compliance with environmental laws.

"We've pretty much tried to stay ahead of it by out-sourcing to environmental engineers to make sure Fleetwing is in compliance, Smith said.