Propane Tank Exchange vs Tank Filling

Propane cylinder filling versus propane cylinder exchange has long been a topic worthy of discussion that really boils down to one concept...how much gas am I getting for what I'm paying? In all truth, it's a very fair question. Afterall, consumers want as much as they can get for as little money as possible. Consumers want value, whether it's refilled or exchanged. Consumers routinely have one question when exchanging their empty propane bottle for a full one...

Do I get less gas in my cylinder when I exchange it than I do when I have it refilled at a propane company? In most cases, the answer is yes, and it's disclosed. As with any product you purchase, the label tells the story.

Regardless of whether you exchange or refill your cylinder, it's advisable to always have a full, spare tank available to hook up when the one being used runs out. This ensures that you don't return a tank or have one refilled that still has gas in it.

Propane Tank Exchange - Filling Process

In order to objectively explain paying for a cylinder that is filled at a propane company versus a cylinder purchased through an exchange retailer, such as a store, it's important to first understand the whole cycle, from production to distribution. So let's look at this starting at the point of the cylinder exchange transaction.

At the point of sale, the customer exchanges his or her cylinder for one supplied by the retailer. These empty cylinders are then stored for the propane company to pick up when the next delivery is made and the cylinder stock is replenished.
Following pick up and at the completion of the route, the driver then returns to the supply point. In many cases, the supply point is a depot, a remote location where cylinders are stored to be picked up by a relay truck an transported back to the filling facility.
Once the cylinders arrive at the filling facility, often called a production facility, each cylinder is inspected and sorted according to the condition of the cylinder.

Preparation Prior to Filling

All cylinders are cleaned of grease and residue to ensure a smooth surface prior to being placed on the process line.
Cylinders are pressure washed and dried prior to being painted.
Cylinders are then painted and dried prior to the fill process.

Filling and Quality Control

Cylinders are visually inspected by the filler and cylinders needing aesthetic attention are pulled off the filling line and returned to the beginning to repeat the preparation process.
Each cylinder is placed on a scale and a fill nozzle is attached to the valve. This is an automated process where the fill nozzle automatically releases from the valve when the set fill weight is reached. In some facilities, the process is manual.
Once filled, the cylinder is inspected for leaks. Leaking cylinders are removed and valves are replaced.
Company branded plastic sleeves or stickers with safety and disclosure information are then placed on the bottle.

Once the entire process above is complete, the cylinders are loaded onto delivery trucks for distribution and the cycle is repeated. The overall management of this labor intensive process has notable challenges:

Inventory Management - Inventory management includes propane, cylinders (stock for distribution), cylinder exchange cages, paint. Two challenging inventory items are valves and new cylinders. Forecasting for these is challenging because a manager can't accurately predict the number of cylinders that need to be purchased to replace scrapped cylinders or the number of valves that will need to be replaced.
Production Equipment - Things break down. Certain pieces of equipment, when shut down due to needed repairs or maintenance, can cause the whole process to stop.
Employees - The production staff in a plant are generally task focused and in some cases, employees are hired on a temporary basis. But regardless, any personnel handling propane must go through training as mandated by Federal and State law. This includes OSHA training, Hazmat training and state licensing requirements. This means that employees hired on a temporary basis are also subject to training requirements. Additionally, employee turnover can be high, resulting in a training process with recurring costs that rarely has a pause.
Commodity Costs - Cylinder exchange companies are subject to the same unpredictable commodity prices that every propane company is subject to.

Propane Tank Exchange - Distribution Process

As described above, the process for filling an exchange cylinder is more of an involved "refurbishment" process. It's not just as simple as filling bottles. Distribution is a whole other animal.

The process for distributing propane cylinders is a fairly straightforward model. Trucks are loaded with full cylinders at the production facility and sent out to deliver to retail cylinder exchange locations. Or in the case of remote depots, a semi, tractor trailer delivers full cylinders for local trucks to redistribute to locations in their region.

Distribution Challenges in the Exchange Process

Propane cylinder exchange distribution is tied to routing deliveries, which is based on forecasting, with software being used for each function. Although helpful for finding trends, the software is not entirely accurate for anticipating behavior, and as such, can lead to scheduling unnecessary delivery stops while missing others in need of cylinders.

When considering the forecasting and routing components of cylinder exchange, it's important to also acknowledge the size of the fleet and the size of the customer base. for compaison, look at the size of a fleet of soft drink delivery trucks...well over 15,000 delivery units, in the case of one soft drink distributor. Now compare this to the fleets of the larger cylinder exchange companies. Combined, there are less than 1,000 cylinder delivery units on the road today and collectively, they're servicing about the same number of customers as that of a soft drink distributor.

Seasonality is also a factor in distribution. People don't generally grill on days when the temperature is 20 degrees, or when it's 90 to 100 degrees. This in itself leads to routing obstacles as well as labor supply issues. Cylinder exchange, and distribution, is highly dependent upon weather and ultimately, comfort.

All in all, cylinder exchange companies do a pretty good job of managing production and distribution. But challenges do exist and those challenges have associated costs.

Propane Tank Exchange or Tank Refill - It's Your Money

While the above is lengthy, it is designed to provide an overview of cylinder exchange operations and present the many moving parts and associated challenges. So in all fairness, it's important to acknowledge there is scale, not only in volumes, but also in challenges.

Propane tank exchange also provides for increased convenience. Many stores are open into the night and nobody wants to run out of propane in the middle of a cookout with family and friends. Propane cylinder exchanges provide for convenience at many levels, primarily proximity and availability.

When exchanging your propane cylinder at a major retailer or convenience store, more often than not, you will get a cylinder that has less than the full 20 pounds of propane. Are you getting cheated? Not necessarily. It could be viewed as a cost of convenience.

If you want the full 20 pounds of propane, take it to a propane company or bottle refill station to have it filled.