Valero Buys Used Trucks to Lower Acquisition Costs

Valero Energy Corporation’s fleet differs from most fleets in one important area: vehicle replacement. “While we replace vehicles used outside our refineries with new vehicles, we buy used vehicles to replace our refinery trucks,” says Randy Burwell, fleet administrator. Burwell manages Valero’s 1,711-vehicle fleet, composed mainly of 1/2- and 3/4-ton trucks used at its refineries. Valero Buys Used Vehicles From GSA and Hertz
Burwell began buying used trucks from the federal government’s General Services Administration (GSA) and Hertz in 2003. Each year, thousands of low-mileage GSA and Hertz vehicles are sold to the public at local auto auctions. Burwell attends about five sales per year. “Our trucks have severe duty even though they travel minimal miles,” said Burwell. “This application is hard on the bodies. However, since buying from GSA and Hertz, we have found the trucks to have been maintained well.” Burwell uses the GSA Web site, www.autoauctions.gsa.gov, and the Hertz web site, www.hertzequip.com, to learn auction dates and get a list of specific vehicles for sale. “The main benefit of this program is purchasing a used, low-mileage, well maintained truck at wholesale prices,” said Burwell. The used trucks are generally purchased around 40 percent of the cost of a new vehicle. “I spend a fair amount of time making sure that trucks are rated for the job to ensure we maintain our high safety record,” said Burwell. Valero Uses In-House and Outsourced Fleet Programs
Burwell’s fleet management team consists of himself and one part-time employee, so they rely on outside fleet programs to help effectively manage and maintain their fleet. “Since the fleet drivers are considered my customers, mine is a service-oriented business,” said Burwell, an 18-year veteran of the fleet industry. “When a vehicle need arises, prompt service is expected. Running a safe and cost-efficent fleet are top goals.” The Valero fleet is very unique in the way it is set up, Burwell continued. “Most fleets are either run as an in-house fleet or subscribe to a leasing company program. The Valero fleet utilizes both, depending on expected use and lifecycle of the vehicle.” Employees who drive a minimum of 1,200 business miles per month are eligible for a company vehicle. All vehicles assigned to departments outside of refineries utilize PHH’s fleet program, while refinery vehicles are owned. The refinery vehicles do not require the leasing company services, including maintenance, since most refineries have in-house facilities. Administrators located at the refineries handle vehicle licensing, and driver call centers, which is coordinated by Burwell. Vehicles operated at the refineries are evaluated for replacement as maintenance costs rise. The severe-duty use of refinery vehicles make a used truck a good fit. “These trucks travel very short distances with heavy tools,” says Burwell. “The body wear is brutal.” Vehicles outside of refineries are replaced at 85,000 miles for cars and 115,000 miles for trucks. Company Refineries Represent 12% Of U.S. Refining Capacity
A leading refining company, Valero Energy Corporation has an extensive refining system with 15 refineries throughout the U.S., Canada, and the Caribbean. Valero’s refineries have a combined throughput capacity of approximately 2.5 million barrels per day, which represents approximately 12 percent of the total U.S. refining capacity. Valero markets products in 40 U.S. states, Canada, Latin America, and the Caribbean region. Based in San Antonio, Texas, Valero has long been recognized throughout the industry as a leader in the production of premium, environmentally clean products, such as reformulated gasoline, California Air Resources Board (CARB) Phase II gasoline, low-sulfur diesel and oxygenates. This Fortune 500 company is also one of the nation’s largest retail operators and has approximately 4,700 retail and wholesale branded sites in the United States, Canada, and the Caribbean under various brand names including Valero, Diamond Shamrock, Shamrock, Ultramar, and Beacon. At a Glance

Valero Energy’s 1,711-vehicle fleet is composed of primarily 1/2- and 3/4-ton trucks used in its refinery operations.

Refinery vehicles are evaluated for replacement as maintenance costs on each rises.

Used vehicles from the U.S.General Services Administration and Hertz replace refinery trucks at a around 40 percent of the acquisi-tion cost of a new vehicle. About Valero Energy Corporation
Fleet Breakdown:
Total vehicles: 1,711
Cars: 303
Class 1-2 trucks: 1,196
Class 3-6 trucks: 73
Vans: 84
SUVs: 54
DaimlerChrysler: 4%
Ford: 58%
General Motors: 30%
Import: 8%
Percentage of vehicles owned: 9%
Vehicles leased/managed: 91% with PHH Annual Expected Revenues for Valero Corporation: $55 billion
Total Corporate Assets: $18 billion
Total Number of Employees: 20,000
Refining Throughput Capacity: 2.5 million barrels per day
Number of Retail Sites: 4,700
Number of Wholesale Markets: Valero markets products in 40 U.S. states, Canada, Latin America and the Caribbean region.