In industries as varied as plastics, manufacturing, and freight shipping, appetites for petroleum products are insatiable. And when the underlying commodity—oil—is notoriously volatile, the search for stable costs is ongoing.
Enter: Noil Petroleum. The Chicago-based distributor leverages economies of scale, coupled with know-how rooted in a family business, to serve a clientele that includes various hedge funds, Southwest Airlines, and the U.S. Department of Defense, to name a few. And it’s on track to grow revenue from $400 million in 2018 to a projected $3 billion in 2019.
The concept is simple: Fewer middlemen means lower costs. Noil Petroleum represents oil majors such as Shell, Exxon-Mobil, Vitol, and Phillips 66, and it sells to wholesalers that supply gas stations and other customers.
But Noil also sells directly to an array of organizations that need gasoline, diesel, jet fuel, lubricants, and other petroleum products. One major trucking company in the Northeast, for example, recently signed a $1.4 billion annual contract with Noil to supply fuel via 12 East Coast terminals.
This obviously helps the two companies, but their customers benefit as well. “They were going through suppliers who would buy fuel from us rather than going through someone at the top of the supply chain,” says Noil Petroleum President and CEO Steve Neely. “By coming under our umbrella, we’re able to save them about $12 million annually.”
Noil has a hard-earned sense of what customers need, partly because Neely has been in the trenches with them. Neely’s father, Spencer, bought his first Chicago gas station in 1967 and built it into a multifaceted enterprise with 32 gas stations, more than 100 tow trucks, and a heating-oil delivery arm.
As a young man, Steve Neely drove a tow truck for his dad, repaired transmissions, and placed fuel orders. “Back in the old days, you’d go out there with a long stick, and stick the gas to see what the levels were,” Neely says.
“Ordering the fuel was very complicated because it dealt with a lot of math, but that’s what we had to do every day.” These days, ordering fuel is often an automated process, and Neely is no stranger to tech solutions. Prior to founding Noil in 2011, he worked in telecommunications and helped launch the T-Mobile brand in the U.S.
Being a nimble player allows Noil to move quickly on a global stage, and the company stepped into the spotlight this past year as an understudy supplier as Mexican refineries shut down. Noil’s solution involves sending hundreds of thousands of barrels of fuel over the U.S.-Mexico border daily.
With the capacity to solve problems on such a large scale, Noil plans to continue scouting new opportunities aggressively. Positioning at the top of the supply chain clearly has its advantages. Download the full Fortune Magazine article.