Transforming Oilfield Transportation with Digital Innovation

Challenges in Oilfield Transportation

Just ten years ago, managing the physical and accounting movement of bulk commodities in the oilfield (crude oil, natural gas, NGL, water, and frac sand), refined products, and finished fuels was almost entirely paper-based. Producers, bulk commodity carriers, crude first purchasers, and energy traders have mostly gone digital, although physical run tickets still exchange hands in the field. Supporting oilfield transportation operations now requires a suite of software and back-office capabilities, including inventory management, scheduling, invoicing, accounts payable, payroll, and compliance. However, these systems can be expensive, resource-intensive, and often only provide a static view of commodity location in the supply chain.

The transportation of oilfield commodities increasingly relies on multiple modes of transport. Once a molecule leaves the wellhead, processing facility, or terminal, stakeholders must track it across trucks, pipelines, railcars, barges, and vessels. Tracking even a single molecule through multi-mode transportation is challenging and limits clear supply chain visibility. Effective processes, technology, and people are required to manage these moving parts, minimize operational costs, and reduce or eliminate demurrage fees.

The Importance of Supply Chain Visibility

Today’s energy industry requires a dynamic, real-time view into the flow of every molecule to optimize costs and supply chains. Companies must accelerate time from order to cash flow, contain costs, deliver exceptional customer service, and meet evolving market conditions. Effective risk management now incorporates environmental stewardship, not just financial and regulatory risk mitigation, as stakeholders look for ESG improvements across the energy supply chain.

This paper focuses on solving the unique transporting and risk management challenges of bulk commodity carriers, providers of crude oil first purchasing and producer services, and energy traders.

Advances in Transportation Management Technology

Three major waves of innovation have enabled a paradigm shift in how stakeholders move and track commodities:

1. 1.Cloud Computing: On-demand access and automatic provisioning of storage and compute power have enabled software as a service (SaaS), avoiding the limitations and costs of traditional on-premise software.
2. 2.Mobile Devices: Real-time data access and acquisition in the oil field via smartphones and tablets support lease assessments, transportation process tracking, and collection of key metadata for every molecule (volume, gravity, BS&W draw, tank strapping). Real-time GPS, accelerometers, thermometers, and cameras allow digital processing and tracking of commodities.
3. 3.5G Connectivity: Brings data access to remote locations, enabling real-time image transfer and large data pipelines for supply chain optimization.

W Energy’s Transportation Management System (TMS) consists of AXLE Hub (a SaaS product for back-office management) and TollTagger (a mobile app for real-time driver location, speed, and status). These tools enable adaptive routing, optimize logistics in real time, and simplify transactions across any mode of transport. The TMS incorporates advanced technology for accurate commodity measurements, such as tank strapping, API gravity, and natural gas volume to BTU conversions.

Bulk Commodity Carriers

In oilfield transportation, the biggest challenge is accounting for custody transfer. W Energy provides a single SaaS solution that combines transportation and risk management with financial accounting, accelerating transactions and providing supply chain visibility. The TMS enables automated dispatch, inventory management, intermodal scheduling, invoicing, payroll, and regulatory reporting. It helps new haulers get started quickly and allows existing haulers to reduce G&A, technology, and fuel costs. The system also manages international fuel tax agreement (IFTA) regulatory reporting and accelerates payments.

Producers and service companies must track multiple types of commodities across multiple modes of transportation. Those who do it well can reduce costs and gain deeper insight into commodity flow. W Energy’s TMS provides a complete back office for bulk commodity carriers, enabling operational efficiencies and cost savings.

Trimac Advances Digital Transformation

Trimac, one of the largest trucking fleets in North America, switched to W Energy to manage fleet logistics, optimize fuel usage, and accelerate regulatory reporting after challenges with legacy software vendors.

Crude First Purchaser & Producer Services

Crude first purchasers face similar challenges as bulk commodity carriers, including the need to automate dispatch, optimize truck routes, and ensure DOT compliance. Digital systems are required to track deal flow, manage field tickets, balance volume measurements, and manage fleet operations. Many first purchasers also allocate sales volumes back to the wellhead and cut checks to interest owners on behalf of producers.

W Energy’s cloud-based TMS and mobile app automate e-ticket flow and field data capture for measurements impacting sales runs. The system manages contracts, allocates sales, values purchases, tracks inventory, and handles payments to interest owners. Its seamless integration with custody transfer, general ledger, and accounts receivable is unique in the market.

Leading First Purchaser & Energy Marketer

A leading Midland-based first purchaser replaced its legacy software with W Energy’s cloud-based solution to automate dispatch, field tickets, accounting, and monthly producer settlements. The solution enables management of value-added producer services, including allocating sales volumes, issuing payments to royalty and mineral interest owners, and preparing state regulatory reporting.

Energy Trading and Risk Management

Energy trading is complex, requiring traders to track prices, forecast averages, and determine optimal times to load, hold, and sell. W Energy’s TMS can be deployed in less than two months and at a fraction of the cost of legacy software. It records transactions, incorporates real-time OPIS and rack prices, and provides marketing teams with instant access to pricing, KPIs, and margin calculations. Real-time communications enable predictive inventory management and rapid response to supply chain anomalies.

Leading Wholesaler and Marketing Company

A major energy trader deployed W Energy’s TMS to automate transaction recording, integrate real-time pricing, and optimize fleet performance. The mobile app provides route optimization and compliance features. The solution reduced invoicing time, improved cash flow, and streamlined tax preparation from three months to thirty minutes.

Optimizing Costs & Carbon Footprint

Effective transportation management is crucial for operational and cost efficiency, as well as emissions and carbon footprint optimization. W Energy’s TMS integrates traffic, weather, and predictive analytics to optimize routes, prevent idling, and avoid deadhead runs, lowering emissions. The system includes a database of hauler types with emissions data, enabling benchmarking and informed procurement decisions. It also taps into ELDs for driver utilization, safety performance, and DOT compliance.

Driving Transportation Management Success Across the Energy Supply Chain

W Energy offers stakeholders deep insight into commodity location at every stage. With AXLE Hub and TollTagger, upstream, midstream, and downstream companies gain agility, performance, cost efficiencies, and ESG improvements.

Benefits for Companies Along the Supply Chain

• ​Oil & Gas Producers: Simplifies invoicing, eliminates transportation management cost center, and provides granular commodity movement visibility.
• ​Bulk Commodity Carriers: Increases operational efficiencies, reduces G&A and technology costs, and enables savings to be passed to producers.
• ​Pipeline Operators: Provides customers with a complete intermodal transportation solution and control over commodity movement.
• ​Crude Oil First Purchasers: Enables sourcing and streamlined delivery of specific commodity grades, and accelerates producer services.
• ​Natural Gas Processors: Reduces transportation costs and risks, improves marketing operations, and keeps producers and customers up-to-date.
• ​Refineries: Provides deep visibility into long supply chains and clean fuel movement.
• ​Energy Traders: Increases optionality, maximizes margins, enhances agility and competitiveness, and mitigates financial and regulatory risks.

Energy companies need a holistic picture of commodity flow across basins and transportation modes. W Energy delivers a unified oil and gas SaaS ERP, spanning upstream and midstream workflows, including financials, accounting, land management, production operations, gathering, pipeline, plant accounting, marketing, trading, and risk management.