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MAXUM

PANAMA - Energy & Mining

Rafael “Ralph” Smith

General Manager, Maxum Oil Service de Panama, S.A.

Bio

Ralph Smith is a Strategic Sealift Officer at the U.S. Navy Reserve and serves as the General Manager at Maxum Oil Service de Panama, S.A. With over two decades of experience in the oil and maritime industry, Ralph has been a driving force in overseeing operations, lubricant blending, marketing, human resources, and accounting departments. He is directly responsible for supplying marine diesel to U.S. Naval vessels calling at Balboa and Cristobal. Ralph holds an MBA in Entrepreneurship from the University of Louisville and a BSc in Marine Transportation from the United States Merchant Marine Academy. His professional journey includes significant roles in the U.S. Navy Reserve and maritime industry, demonstrating his dedication to strategic leadership and operational excellence.

"Often, our competitors may try to make a proposal more attractive by offering cheaper products. This is because they cannot guarantee the support and quality of service that we offer in terms of reliability or shorter delivery times."
TBY talks to Rafael “Ralph” Smith, General Manager of Maxum Oil Service de Panama, S.A., about partnerships, competitive advantage, and competition.
How did GP RESOURCES partnership with Fenton Bunkering lead to the formation of Marine Oil Service and its success?

In the 1990s, GP RESOURCES Inc, a marine lubricant delivery and diesel supplier, from Los Angeles, California, began a period of expansion. Led by Mr. John Zar, GP Resources acquired other similar businesses, creating a marine delivery service network all the way down the US West Seaboard, operating as Ranier Petroleum, in Seattle, Washington, and as GP Resources, Inc in Los Angeles, California. Combined, these companies were collectively known as PECOS (Petroleum Companies) and they had full access to all the west coast ports and major markets from the Canadian border all the way to the Mexico border, even reaching as far south as Manzanillo, Mexico. Seeking to capture the marine lubricant volumes that passed through the Panama Canal, it became obvious to him the necessity to partner with an existing company to become established in Panama. In 1998 GP Resources, Inc. entered a strategic joint venture and partnered with Mr. Robin Morland of Fenton Bunkering, at the time a subsidiary of C.B. Fenton Agency, resulting in the creation of Marine Oil Service de Panama, S.A. (MOSSA), which would eventually become Maxum Oil Service de Panama, S.A. Prior to Marine Oil Service entering the market, marine engine lubricants were delivered to ships in Panama in standard 55-gallon steel oil drums. This proved to be a very slow, complicated, and labor-intensive operation, often taking upwards of several hours to complete a normal delivery. GP Resources, through its MOSSA partnership, leveraged its years of experience and introduced the revolutionary concept of bulk lubricant marine operations in Panama by building an initial 180,000-gallon multi-tank storage facility, and adding a 15,000-gallon self-propelled lubricant barge and several semi-tanker trucks, thus drastically reducing delivery times and costs, and fostering in a new era in marine lubricants delivery in Panama. Deliveries that before would take several hours now could now be done in mere minutes. MOSSA flourished under this arrangement but eventually GP acquired its partners’, Fenton Bunkering´s, stake in the JV, making MOSSA wholly a subsidiary of the GP/ PECOS group of companies. Around 2005-2006, MOSSA acquired ESSO Standard Oil’s lubricant blend plant in Panama, allowing it to blend its own products for renown oil majors such as Shell, Castrol, Chevron (FAMM) and Total. This unique capability positioned the company as a major player in Central America with the sole plant in Panama. As the years passed, the plant expanded, accommodating more tanks, higher volumes, and adding many more brands, both small local as well as major oil players, to its portfolio. While fast-moving lubricants were blended in-house, slow-moving ones were procured directly from suppliers and stored in a bonded warehouse. In 2008, Maxum Petroleum emerged after PECOS was bought out by the private equity company, SLI, that aimed to consolidate petroleum-related businesses throughout the United States. This new group became Maxum Petroleum, Inc. Meanwhile in Panama, Maxum Oil Service de Panama, S.A., as MOSSA, was now called, continued to thrive, experiencing consistent growth year to year, and even acquired additional equipment. In 2014, Maxum Petroleum, was acquired by Pilot Flying J, and almost immediately, not wanting an international subsidiary, Pilot sold Maxum Oil Service, their sole international Panama operation to Belle Chasse Marine Transportation Company, from New Orleans, Louisiana. From that point on, under the steady guiding hand of Mr. Gordon Konrad and later his son Shawn Konrad, Maxum Oil Service continued to enjoy further growth and expansion. Over the years, Maxum Oil Service in Panama continued to expand its operations, adding a larger warehouse, more storage tanks, and increased their fleet of trucks and marine vessels. Through these changes and advancements, the company’s legacy of growth and success has been shaped, with dedicated employees witnessing the transformation from the early days to its status as a major player in the marine lubricant delivery industry.

What is the main competitive advantage of the company?

Maxum enjoys several competitive advantages over its competition. Our main advantage is that we own our entire logistical chain, starting from our storage tanks located on the water in the port of Balboa, where the base oil is shipped in, to our blending plant where we blend and store all the marine lubricants, and finally to our fleet of trucks and barges for all the marine deliveries. Without this, we would be heavily dependent on outside third-party truck or barge companies and be at the mercy of their schedules. This has allowed us to withstand shocks, such as economic downturns, and to be more flexible when scheduling deliveries to ships that have constantly changing timetables. Furthermore, our crews and personnel are loyal and hardworking. To say they are our greatest asset is an understatement. They are all incredibly knowledgeable on all local laws and regulations, including maritime authority laws, fire department regulations, highway transportation and safety codes, and Department of Energy regulations. There are those that think we merely offer physical products, i.e., lubricants, marine fuels, etc. However, it is more accurate to say that we offer a specialized service. The products we blend, and store really only attain their value when paired with our reliable delivery service, they would not go anywhere without our value chain. We offer the right product to the right place at the right time in the right quantities. If any one of those elements is missing, it would provide completely different results.

What advantages does the company’s storage capacity and blending capability offer over competitors with longer lead times?

The main advantage offered by our blending plant is that we can blend any product at a moment’s notice, as well as also have storage capacity for several months. We can service different plants or facilities on short notice, if necessary, on the same day. The other companies must import their finished products into Panama and require very long lead times, in some cases two or three months, and must keep large quantities of inventory on hand to ensure they don’t run out. If a customer has an urgent need for additional products due to some unforeseen emergency at their facility, we can supply them within a very short span of time. They cannot be expected to wait days or weeks for it to arrive to Panama. Often, our competitors may try to make a proposal more attractive by offering cheaper products. This is because they cannot guarantee the support and quality of service that we offer in terms of reliability or shorter delivery times.

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