‘Uber’ For Oilfield Trucking: Bringing Sharing Economy Platforms To O&G

Using mobile apps that enable trucking companies, carriers and shippers to share risk and minimize empty backhauls in oilfield services simply makes sense, say some tech-savvy solution providers.

“If you think about a well in the Permian Basin, it’s going to use 300 truckloads of sand. Every time a truck goes back to the sand mine, it’s going back empty,” Thomas Hunt, account executive for capSpire, told the Bulletin. “It’s the same case with a water truck going from the well to a disposal well — it’s going back empty.

“When a crude truck is picking up from the wellhead, it’s usually going up and delivering the crude to a pipeline injection point, and then it’s going back empty.”

By harnessing the power of communication technologies, the sharing economy presents an alternative consumption model that could increase efficient use of resources. In a capSpire blog, Hunt proposed a possible solution for inefficient transport in the oilfield: ‘Uber’ for crude trucks.

“If there was a platform, such as a sort of Uber-style platform, where ... rather than having a relationship with all these trucking companies, I just have a relationship with the platform, whether that’s [capSpire’s] Gravitate platform or some other platform, when I want to collect crude from a location and deliver it to a destination, then, just like you’d do with Uber, I’d order that load through the application. It’s super efficient. It’s all done online.

“In the same way it works for Uber, out of the probably 2,000 trucks operating in the [Permian] Basin, the most effective and most efficient truck to collect that barrel is going to be the one that picks it up. Rather than sending one from 50 miles away to travel empty to pick up from that well, it’s going to be one that was close by.”

According to Hunt, the concept is to share data across all haulers in a more efficient way, driving cost reductions across the entire ecosystem. At capSpire, its Gravitate solution is a customer portal, a platform technology, which is very extensible and could be adapted for the oilfield trucking purpose, although it is not being used as such currently.

“The technology is 100 per cent there, and I think there are significant cost savings to be had from it, but really for most companies, like for a company such as [Uber Technologies Inc.], the value isn’t probably big enough for them to invest in it. It would be a smaller company that would probably come up with the platform.”

Mullen Group Ltd. has not one, but two apps for oilfield trucking, or any trucking really — Moveitonline and Haulistic. The latter is a new dispatch tool (currently in the testing phase), which makes it easier for drivers to pick their hauls. The former (which is a few years old) is more for B2B transactions.

“The idea with Moveitonline is I can go to the screen and see where all the loads are and where they need to be moved,” Randy Mercer, the company’s director of HSE and risk management, told the DOB about the proprietary online logistics marketplace. He added: “In Moveitonline, customers can go online directly, open an account and do transactions themselves. Haulistic is more company-to-drivers. Moveitonline is company-to-company.”

A new market model based on sharing resources between business enterprises depends on, among other things, release of redundant or not fully-used resources, as well as improving benefits due to goods and services access for customers, suggests a 2019 research article from Europe’s Częstochowa University of Technology.

Business-to-business sharing economy models change how companies manage and use assets, says the article, translating into savings and efficiencies based on mutual co-operation. “A lot of enterprises possess spare capacities which can be shared with other companies on the basis of co-operation networks and exchange of information.”

For capSpire, a consulting and solutions firm currently with five active Canadian clients (mostly in energy), while developing his company’s current third-party holder portal — Gravitate — to serve as an oilfield trucking platform is a substantial undertaking, Hunt said it is the type of technology that could be used for such an Uber-style solution.

“If I have goods that want to go from one location to another, then there should be one platform you can log into, and, regardless of the transporters you deal with, you can use some sort of transporter to get that product to move with someone already doing that route.”

Moveitonline and Haulistic: Mullen Group’s app solutions

No money is actually transferred over moveitonline.com. This online service simply provides connection for the transportation and logistics industry, thus enabling more company-to-company transactions. In this way, for the ever-evolving number of firms on the platform, Mercer sees it as somewhat analogous to another online service.

“We call it, for lack of a better word, a ‘dating’ site,” he said. “It’s a way to hook up two carriers. They consummate the deal on their own. We just provide a connection platform to make it happen.”

The site shows loads sitting around North America, each of which a user can zoom in and click on for more details, such as the type of load, pickup and delivery dates. Mercer added: “If you want to click on it, then you can click on the load you’re interested in and see who you can contact for that load. That’s Moveitonline.”

Users can sign up for free, and are immediately able to post trucks and loads while receiving notifications about relevant loads posted in their areas of business. In this way, the load-matching operating platform connects shippers, carriers and the trucking industry, providing price discovery and service capabilities within one system.

As for Haulistic, it is a brand new service and a new way to dispatch, suggests the Mullen Group HSE and risk management director. The primary goal of this application is to give drivers more choice. “It’s certainly a tool for a driver to use. We’re going to revolutionize the way drivers work.”

Currently undergoing testing with one Mullen Group entity, Mercer noted, the plan is to roll out the Haulistic app across all Mullen Group companies in 2020, and potentially more broadly further into the future.

“Ultimately, the old, traditional way is a customer calls a company to move a product. They call customer service. Customer service puts it in a computer, and dispatch then assigns a driver to that. If customer service puts their entries into a system such as Haulistic, then the driver chooses. We just skipped the dispatch process. That’s evolution.”

There are filters built into Haulistic as well, he added, and so a tanker carrier (for example) can filter the app to only show ... tanker loads. If a trucker only wants to transport goods in the Grande Prairie (GP) region, then there are filters for that as well. “You can schedule your loads that you pick up or decline. You can review upcoming trips, and it keeps track of past trips. You always have a rolling tally of what you’ve done and what’s coming up for work.”

Further, Mercer noted, Haulistic will work within the Canadian oilfield segment. “We have companies tied to the energy space. We have pipe yards too in the GP area and Edmonton area that we have to move.” He added: “Whether you’re moving pipe, a load of mud or toilet paper, you’re moving product.”

Whether it is for oil and gas, long-haul trucking or transportation in general, according to Mercer, there are more drivers currently retiring than there are young people coming into the industry, and an app such as Haulistic may help companies trying to recruit new drivers.

He said: “We must make it a better lifestyle to attract people to our industry. Otherwise, they don’t want to come. Young people today don’t want to come out of school and drive truck. They want to be doing other things. They want to be ‘techie,’ work with computers, and so we must make their environment more attractive. This is a way to do that.”

Challenges to the ‘Uber’ model for oilfield trucking

In terms of specific challenges to a sharing app for oilfield trucking, accompanying such an app ideally would be trucks that are each capable of hauling sand, water and crude, Hunt told the DOB, but currently these trucks tend not to carry such multiple commodities.

“When it comes to hauling sand and then taking out water, I don’t know how you’d optimize that, because essentially the routes are one directional.”

For first purchases, Hunt noted, everyone hauls oil, and so the sharing-trucks model works even if the oil wells are dissimilar. When trying to optimize across different commodities, though, it becomes more complicated. He added: “It may be those trucks could be dual purpose, and so they could hold sand and water, which would probably cut down on some of the deadheads, but I think that’s really the challenge — that you’re dealing with two different commodities.”

Scale and complexity key for sharing economy to work

Regions in the U.S. such as the Permian, Eagle Ford and Bakken are ideal for implementing an Uber-style platform for oilfield trucking because there is a high density of activity, noted Hunt, and scale is important.

“There is a lot of activity, lots of wells, and lots of complexity with midstream infrastructure,” he said, noting his consulting and software solutions company currently is increasing its Canadian presence, having just hired a managing director in Calgary. “It’s a growing industry in Canada, and there are new midstream companies in particular popping up that need software solutions. We have a big Canadian focus, and we like working up there.”

He added: “One thing in the Canadian space we’ve seen is probably more of the companies are coming to us to really help them drive their digital transformation programs.”

For Haulistic, Mercer said, Mullen Group’s newest app will be even more usable as more users download it, as a higher density of users increases optionality in terms of, for example, picking up some particular type of freight in a region. “It solves lots of deadhead issues. It’s a better way to dispatch. That’s our belief. There certainly will be a lot more [users] on here than what you see today.”

While currently pairing up loads with drivers, he added, the app will evolve to provide other useful data for users, including everything from location of upcoming truck stops or fuel stations to local weather. “We’ll link it all to the app to give it a more customized feel for the drivers and make it a better experience for them. That is what people do today. They have their smartphones and they work off their phones.”

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