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They had gas, but credit was on empty

Wild post-storm fuel sales pushed Riggins to the brink

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Riggins had new customers, but no money coming in, when Sandy’s struck. Paul Riggins, left, with son Matthew.
Riggins had new customers, but no money coming in, when Sandy’s struck. Paul Riggins, left, with son Matthew. - (AARON HOUSTON)

When Hurricane Sandy hit and gasoline shortages became an unexpected and crippling side effect of the storm, Riggins Oil, in Vineland, became a sort of savior. The company distributed more than 7 million gallons of fuel throughout the affected region in the two weeks after Sandy struck.

That seemingly would be an unexpected boon for Riggins' 87-year-old oil business, a silver lining in the dark cloud that hung over the state.

Instead, it pushed the company to the very limits of financial viability.

“We were down to, like, $7,000 in our bank account, and we had, like, $23 million in receivables,” CEO Paul Riggins said. “We had all the trucks and all the fuel, but the suppliers are only going to go so far out with giving you credit.”

Riggins Oil was in a fortunate situation after the storm hit on Oct. 29.

The company's headquarters were largely spared any direct impact. An emergency generator — the company's response to Hurricane Irene in 2011, among other storms — kept power flowing for Riggins and his employees. And any of its trucks stationed in low-lying or flood-prone areas had been removed far ahead of Sandy's first powerful gusts, Riggins said.

So the company's infrastructure was up and running, which was a huge help. But Riggins had the added benefit of longstanding working relationships with fuel suppliers in multiple states, including Delaware and Pennsylvania.

“Being in the southern part (of the state) and our fleet intact and having the buying arrangements set up — we could just go,” Riggins said. “We were in the right place.”

And the demand was insatiable.

“It was wild. We had literally everybody calling us, begging us for gasoline and diesel. And it was a full range of players, from a service station to government facilities, critical infrastructure sites, hospitals,” Riggins said. “It was one after another after another, and the volume was so unbelievable.”

One of those entities clamoring for gasoline was Union County, which desperately needed gasoline to power its police cars, fire trucks and ambulances, as well as the bulldozers and wood chippers needed to clear debris.

Chris Meehan, director of motor vehicles for Union County, said demand for gasoline surged after the storm. Not only was power down at the county's fueling stations, but commercial stations were powerless throughout the area, too.

So Riggins, which already had a contract to provide fuel for Union County vehicles, was sending trucks loaded with gasoline up to the area nearly every day for the first two weeks following Sandy.

“Riggins was here. They were really tremendous. Delivering at 7 o'clock on a Friday night,” Meehan said. “We just would have been dead in the water without it.”

And the demand wasn't coming just from existing clients, such as Union County. When word got out that Riggins could do what few other oil companies could in the weeks after the storm, even the FBI reached out to ask for gas, Riggins said.

That made the lack of finances a particularly dire situation, he said.

“Municipal governments weren't worrying about their bills,” he said. “They were worrying about trying to get all these problems solved.”

Riggins said he doesn't knock them for the shift in focus, but by the third day after the storm, the company had reached a breaking point. There was no money coming in, which meant there was no way to pay for more gas. And once you use up a $2 million credit line with a fuel supplier, they are reluctant to loan you more, he said.

So Riggins reached out to the state's emergency response team, which put him in touch with governor's office and the state's Economic Development Authority. Those officials then reached out to Riggins' bank, PNC, to ask if there was any way, given all that Riggins Oil was doing for the state, that the bank could temporarily increase the company's credit line.

The bank said yes.

“It was a beautiful thing,” he said. “I'm going to tell that story to my grandchildren.”

For PNC, the decision was cut and dry.

“We are fortunate to have a long-standing relationship with Riggins Oil,” said Denise Viola Monahan, executive vice president for PNC Corporate Banking in southern New Jersey, in a statement.

“Working quickly to increase a line of credit so that they could deliver fuel destined for northern New Jersey residents struggling to recover from Hurricane Sandy was more than just a testament to that relationship; it was simply the right thing to do.”

In the year since Hurricane Sandy hit, Riggins and his son, Matthew, have held on to some of the new customers they serviced during the storm, but others have fallen away, wooed by other companies offering better prices.

But they weren't in it for the economic benefit. They weren't really trying to be heroes, either. That was just a perk.

“When you have a hurricane and everybody actually likes you, it's like, 'Wow, that's really nice,'” Riggins said with a laugh.

E-mail to: maryj@njbiz.com
On Twitter: @mjohns422

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