Alan Levi chuckles over all the commotion about consolidation in the PHC industry. Been there, done that. Consolidation has been going on for the last couple of decades in the fuel oil business that is the bedrock of his family’s 66–year– old Long Island company. The industry used to be dominated by small family firms just like their OSI (formerly Oil Services, Inc.). Now a large share of market belongs to huge companies doing hundreds of millions of dollars a year in annual volume. Maybe they’ve lost some personal touch with customers, but their prices are right thanks to economies of scale and buying clout. In the fuel oil business, that means almost everything.
Alan laughs some more at the notion that consolidation spells doom for independent firms. Independents are still plentiful in the fuel oil business, though many are barely hanging on. OSI might well be among them instead of prospering like never before, had they stayed bolted to the good old days. To compete in the modern marketplace, they had to modernize. Patriarch Irving Levi knew this, as did his sons Alan, Richie and Marty, who managed the nuts and bolts of their modernization drive.
Most crucially, they had to find a way to keep competitive with heating oil prices. This they’ve accomplished thanks to a computer-satellite program set up by Marty to track oil prices and futures instantaneously. This enables OSI to buy oil in stages throughout the year at set prices. In turn, they offer a program to customers of guaranteed pricing throughout the year — no small benefit to homeowners who never know how much to budget for heating bills amid the vagaries of winter and the notoriously unstable fuel oil market.