Business Monday

Medley-based Tropic Oil runs on full tanks

Stephen Gorey, is the president of Tropic Oil, a 62 year old company that uses its own fleet of trucks to distribute bulk fuel and lubricants to marine, aviation, and industrial customers. Stephen stands in a field of oil barrels on the company grounds, Wednesday, October 15, 2014.
Stephen Gorey, is the president of Tropic Oil, a 62 year old company that uses its own fleet of trucks to distribute bulk fuel and lubricants to marine, aviation, and industrial customers. Stephen stands in a field of oil barrels on the company grounds, Wednesday, October 15, 2014. Miami Herald staff

Tropic Oil is not a well-known name to motorists who need gas or motor oil on Florida’s highways.

But to people who run cargo ships, cruise vessels, trucking companies, construction sites, as well as many yacht owners, Tropic Oil’s red trucks are a familiar sight, filling up their tanks with diesel fuel and providing them with specialized lubricants for marine and truck engines, hydraulic systems, forklifts and other equipment.

Medley-based Tropic Oil Co., founded in 1952, buys fuel (mostly diesel) and lubricants from major oil companies, stores them at a tank farm holding more than 1 million gallons of petroleum products or — for lubricants that arrive in cases — at one of its warehouses. The bulk products are then dispatched in 7,500-gallon tanker-trailers and prepackaged lubricants are sent out in other trucks. Tropic’s customers are located all over South Florida and beyond.

On a typical day, Tropic drivers pull their tanker trucks up to the loading rack in Medley, where they pump diesel fuel or lubricants from the tall, white storage tanks into their trucks. There are 45 tanks at the tank farm, holding between 15,000 and 30,000 gallons each.

Typically, diesel fuel and lubricants delivered to a seagoing vessel will require several truckloads, for a total cost of between $50,000 and $60,000 for diesel and about $75,000 for lubricants.

Tropic also sells diesel fuel and gasoline to fleet customers and truck owners with special access cards at a 24-hour fueling station in Medley and eight other locations in South Florida.

In addition, some small business owners pull up to the Tropic warehouse and buy cases of motor oil and hydraulic lubricants for dump trucks and other equipment.

“We have customers from Cape Canaveral to Key West, all over South Florida and up as far as Tampa on the west coast,” said George E. LeVasser, Tropic’s CEO, majority shareholder and son of the company’s founder. “And we treat our customers with honesty and integrity.”

Customers include Nighthawk Trucking, Seaboard Marine, Royal Caribbean, Tropical Shipping and Integrity Fuels Logistics.

ExxonMobil, a major supplier to Tropic, is also a customer. Tropic buys products directly from an ExxonMobil refinery, stores them and, when Exxon makes a sale to a large customer (such as a cruise line), re-sells the products to Exxon and delivers them to the customer. Tropic earns fees for these services, and Exxon saves money because it doesn’t have to build costly new tanks to store products it knows it will eventually sell in South Florida.

Tropic’s sales volume — including lubricants, diesel fuel and gasoline — has increased by 8 to 10 percent over the past five years, and the company is adding new storage capacity to keep up with demand.

Tropic has 90 employees, some of whom have been at the company for 40 years. The average worker has been at Tropic for 16 years. Employees include experts who specialize in the many different lubricant formulas customers need for marine and industrial applications.

Most of the company’s oil products — lubricants and diesel fuel — arrive in railroad tanker cars on Tropic’s own private siding at its 10-acre property in Medley. The products are pumped into storage tanks and, when needed, pumped into tanker trucks for delivery. Tropic also buys thousands of cases of lubricants that are stored in its two warehouses.

Tropic owns and operates its own fleet of trucks: 35 trucks (tractors) and 45 tanker-trailers, each equipped with special equipment to avoid spills and meet strict environmental regulations.

To limit costly down time, Tropic has its own truck maintenance and repair center in Medley.

Each year, Tropic sells about 5 million gallons of lubricants and 50 million gallons of diesel fuel, LeVasser said. It also transports heavy bunker fuel that many ships use for third parties.

Tropic sells a dizzying array of lubricants supplied by companies like ExxonMobil, Shell, Total and other major oil companies and smaller, specialized producers. These lubricants range from standard motor oil for cars and trucks, to different formulas that are used above the piston rings in a large ship’s engine or below the rings. Different types of marine engines require different lubricants to function properly.

Other specialized lubricants are used in hydraulic systems, transmissions, steering and control systems, thrusters, gear boxes and other equipment.

LeVasser, who grew up in Florida, didn’t plan on running the company his father founded 62 years ago. “I was good in chemistry and I graduated from the University of Florida with a degree in pharmacy,” LeVasser said. After graduation, he went to Maryland and worked there for five years as a pharmacist.

“I hated it,” LeVasser said. “So I came back to Florida and worked at Tropic.” His first job was working in the warehouse, when the company had about 10 employees.

“The company was founded by his father, but George made it grow,” said Stephen Gorey, Tropic’s president, who joined the firm in 1990.

LeVasser worked with his father to build the business, assuming more and more responsibility as his father grew older.

For example, LeVasser came up with the idea of building fuel stations (called card-lock fueling stations) for operators of truck fleets. The fuel pumps at these stations operate only with special cards issued to customers. The stations have no attendants and are open 24 hours every day. They provide customers with records of who used the station, how much was spent on gas or diesel fuel and when each purchase was made, helping to avoid fraud among fleet operations.

The stations, a natural extension of Tropic’s core business, provide service to a new group of customers and generate additional revenue for the company.

Tropic was able to expand dramatically after Exxon and Mobil merged in 1999, said Gorey, who grew up in Plantation and earned a degree in business management at Troy State University in Alabama. After the merger, Tropic was able to sell both Exxon and Mobil lubricant lines since Mobil no longer ran a separate nationwide distribution business. Tropic thus gained many new customers.

Running an oil distribution business is very expensive. Tropic has about $10 million worth of lubricants in stock at any time. The company, subject to strict state and local environmental rules, also has to spend thousands of dollars to equip each new tanker truck with special equipment to guard against spills, and invests in a wide range of equipment to prevent environmental problems at its storage facilities.

Tropic is investing aggressively for the future. It recently acquired 41/2 acres of property (including a warehouse) adjacent to its current land, and now has 10 acres. It is also adding new storage tanks, pumps and equipment. “We hope to continue growing, and we’re constantly looking for new markets,” said Gorey, who began working for Tropic after he graduated from college. “We compete every day — it’s a business with very thin margins,” he added.

Tropic competes with several regional oil distributors, such as Port Consolidated and Sugar Supply Inc.

LeVasser, who has donated to Doctors Hospital and provides extra health and educational support to employees, is proud of the company he built.

But he is often irritated by people who think the oil distribution business is easy money, confusing oil distribution services with the major oil companies that make billions of dollars from producing and selling crude oil.

“Our people work very hard and the margins are slim,” he said. “We have about $200 million in sales and we’re lucky to make 1.5percent.”

Tropic’s customers praise the company for delivering what they need whenever they need it.

Dolores De Leon, a marine fuel broker at Integrity Fuels Logistics in Miami Springs, has been buying fuel from Tropic Oil for the 13 years she has worked with Integrity but says the company has been working with Tropic for about 20 years.

“My job is to buy fuel for tankers, cargo vessels and cruise ships, and I’m always shopping for price, quality and service,” she said. Since ships can arrive at port later or earlier than expected and need to refuel quickly, “Our suppliers, like Tropic, have to be able to deliver fuel any time of the day or night. They need to have trucks and product ready to go.”

Jim Lopez, president of Nighthawk Trucking in Miami, moves containers from PortMiami, Port Everglades and freight yards to clients all over Florida and throughout the Southeast. “Our fleet consists of 100-plus trucks as well as the heavy equipment we use to move containers at the freight terminal,” Lopez said.

Nighthawk’s trucks and equipment need large volumes of fuel and lubricants year-round. “We chose Tropic Oil after several attempts using other vendors,” Lopez said. “They provide us with 24-hour service. You can pick up the phone at any time, and your problem is taken care of immediately. And Steve [Stephen Gorey, Tropic’s president] is on call 24 hours a day — on weekends and vacation. He is always available.”

Being able to meet unforeseen needs around the clock makes a big difference for Tropic’s clients, who usually work 365 days a year and can’t afford down time due to a lack of fuel or lubricants that keep their engines running.

“Their service is the best,” Lopez said.

The writer can be reached at josephmannjr@gmail.com.

Tropic Oil Co.

Business: Distributes a wide range of lubricants and fuels to customers in the marine sector (cargo ships, cruise lines, tugboats, yachts), construction and industry (heavy equipment, generators, on-site fuel tanks) and commercial and fleet customers from Cape Canaveral to Key West on the Atlantic Coast and as far north as Tampa on the Gulf Coast. Sells products from ExxonMobil, Shell, Total and others.

Headquarters: 10002 NW 89th Ave., Medley.

Founded: In 1952 by George A. LeVasser.

Employees: 90.

Plant and equipment: Ten acres in Medley with administrative offices and warehouse; tank farm with 1 million gallons of storage capacity for lubricants and fuel; a delivery fleet made up of 35 trucks (tractors) and 45 tanker-trailers; maintenance and repair facility for its fleet; a fuel station for fleet customers and a rail siding for receiving tank car shipments from oil refineries.

Management: George E. LeVasser, CEO and son of the founder; Stephen Gorey, president.

Ownership: Majority owned by George E. LeVasser, minority shareholder Stephen Gorey.

Revenues: Annual sales of around $200 million.

Customers: Seaboard Marine, Royal Caribbean, Tropical Shipping, Nighthawk Trucking, Integrity Fuels Logistics, ExxonMobil, plus others.

Website: www.tropicoil.com.

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