USD Partners LP (USDP): Business Model Canvas

Key Partnerships

USD Partners LP has developed a strong network of key partnerships in order to successfully operate as a midstream energy company. These partnerships play a crucial role in supporting our business operations and driving growth. Our key partnerships include:

• We have established relationships with railcar leasing companies to secure the necessary railcars for transporting energy products to and from our terminals. These partnerships allow us to efficiently and cost-effectively move products across our network.

• We partner with terminal service providers to ensure the smooth operation of our terminals. These partnerships help us maintain high levels of operational efficiency and provide top-notch services to our customers.

• We collaborate with oil and gas producers to handle the transportation and storage of their products. By working closely with these producers, we can tailor our services to meet their specific needs and ensure a seamless supply chain.

• We work with pipeline operators to leverage their infrastructure and expand our reach in the energy market. These partnerships allow us to access new markets and diversify our revenue streams by connecting our terminals to major pipelines.

Key Activities

The key activities of USD Partners LP (USDP) revolve around providing essential services in the midstream energy sector. These activities are crucial for the transportation, storage, and handling of crude oil to ensure a reliable supply chain and compliance with industry regulations.

Transporting Crude Oil: One of the primary activities of USDP is the transportation of crude oil from production facilities to refineries and distribution centers. This involves managing a network of pipelines, railcars, and trucks to efficiently move crude oil to its destination.

Terminal and Storage Services: USDP also provides terminal and storage services for crude oil. This includes maintaining and operating storage tanks, handling facilities, and other infrastructure necessary for storing large quantities of crude oil safely and securely.

Ensuring Safety and Compliance: Safety and compliance are paramount in the oil and gas industry. USDP invests in training programs, technology, and maintenance to ensure the safety of its employees, the public, and the environment. Additionally, the company stays current with all industry regulations to maintain compliance at all times.

Maintaining Infrastructure: Another key activity of USDP is maintaining its infrastructure. This includes regular inspections, repairs, and upgrades to ensure that pipelines, terminals, and storage facilities are in optimal condition for continued operation.

Overall, these key activities are vital for USDP to fulfill its role in the midstream energy sector and provide essential services for the transportation and storage of crude oil.

Key Resources

Rail terminals: USD Partners LP owns and operates a network of strategically located rail terminals that serve as critical infrastructure for the transportation of energy products, including crude oil, refined products, and other liquids. These rail terminals are equipped with state-of-the-art facilities to efficiently load, unload, and store various types of commodities.

Railcars: The company maintains a fleet of railcars that are used to transport products between its terminals and customer locations. These railcars are well-maintained and compliant with industry standards, ensuring the safe and efficient transportation of goods.

Skilled workforce: USD Partners LP employs a team of skilled professionals who bring expertise in various areas, including operations, maintenance, safety, and customer service. This workforce is essential for ensuring the smooth operation of the company's terminals and meeting the needs of its customers.

Strategic locations: The company's rail terminals are strategically located near major refining centers, production facilities, and distribution hubs, allowing for efficient access to key markets. These locations provide a competitive advantage by reducing transportation costs and improving the overall logistics of the supply chain.

• Access to major markets
• Proximity to key customers
• Connection to key transportation routes

Overall, these key resources enable USD Partners LP to provide reliable and cost-effective transportation solutions for its customers, while maintaining a strong competitive position in the midstream energy sector.

Value Propositions

USD Partners LP (USDP) offers several key value propositions to its customers in the oil and petroleum industry:

• Reliable transportation of oil and petroleum products: USDP prides itself on its ability to provide reliable transportation services for oil and petroleum products. With a fleet of well-maintained and state-of-the-art railcars, customers can trust that their products will be transported safely and efficiently to their desired destinations.
• Strategic terminal locations: USDP's terminals are strategically located near key oil and gas production areas, as well as major refineries and end markets. This allows for quick and seamless transportation of products, reducing transit times and costs for customers.
• Quick and safe delivery services: USDP prioritizes quick and safe delivery of products to customers, ensuring timely and secure transportation from origin to destination. With a focus on operational excellence, USDP's delivery services are among the best in the industry.
• Compliance with safety and environmental standards: USDP is committed to upholding the highest safety and environmental standards in its operations. With a strong focus on regulatory compliance, USDP ensures that all transportation activities are conducted in a safe and environmentally responsible manner.

Customer Relationships

USD Partners LP (USDP) maintains strong customer relationships through various strategies aimed at fostering loyalty and ensuring satisfaction. These relationships are crucial for the success of the business and are characterized by:

• Long-term contracts: USDP values long-term partnerships with its customers, providing stability and predictability in its revenue streams. By entering into long-term contracts, USDP can secure a steady flow of business from its customers and establish trust and reliability.
• Customer support services: USDP offers exceptional customer support services to address any issues or concerns that may arise. The company values open communication with its customers and strives to provide timely and effective solutions to meet their needs.
• Partnership approach: USDP takes a collaborative approach with its customers, viewing them as partners in success. By working closely with customers to understand their unique requirements and challenges, USDP can tailor its services to deliver maximum value and drive mutual growth.
• Regular communication: USDP maintains regular communication with its customers to keep them informed of any updates, changes, or opportunities that may impact their business. By staying in touch with customers and seeking feedback, USDP can continuously improve its services and strengthen its relationships with customers.

Channels

USD Partners LP utilizes a variety of channels to reach its target customers and generate revenue. These channels include:

• Direct sales team: USD Partners LP employs a dedicated sales team that works directly with customers to promote the company's services and secure new business opportunities.
• Industry conferences: Attending industry conferences and trade shows is an important channel for USD Partners LP to network with potential customers, showcase its offerings, and stay informed about industry trends.
• Online platforms: USD Partners LP leverages online platforms such as its company website, social media channels, and digital advertising to reach a wider audience and attract potential customers who may be searching for bulk liquid logistics services.
• Trade publications: Advertising in trade publications and industry magazines is another channel that USD Partners LP utilizes to reach its target market and establish itself as a trusted player in the industry.

Customer Segments

USD Partners LP serves a variety of customer segments within the oil and gas industry, including:

• Oil and gas producers: These companies are responsible for extracting crude oil and natural gas from the ground. They rely on USD Partners LP to transport their products from the production site to refineries and other customers.
• Refineries: Refineries are facilities that process crude oil into products such as gasoline, diesel fuel, and jet fuel. They require reliable transportation services to move their refined products to distribution centers and end users.
• Marketing companies: Marketing companies play a key role in buying and selling refined products in the marketplace. They work with USD Partners LP to transport products to and from various locations to meet customer demand.
• Industrial users: Industrial users encompass a wide range of businesses that rely on petroleum products for their operations. These customers require efficient and cost-effective transportation solutions to keep their operations running smoothly.

Cost Structure

USD Partners LP (USDP) incurs several costs in order to maintain its operations and provide efficient rail transportation services. The key components of its cost structure include:

• Maintenance of railcars and terminals: USDP must regularly maintain and repair its fleet of railcars and terminals to ensure safe and reliable transportation of commodities. This includes routine inspections, repairs, and upgrades to meet industry standards and regulatory requirements.
• Lease payments for railcars and property: USDP leases a significant portion of its railcars and property from third-party suppliers. These lease agreements involve fixed payments as well as variable costs based on usage or maintenance requirements.
• Labor costs: USDP employs a workforce to manage its day-to-day operations, including railcar maintenance, terminal operations, logistics coordination, and administrative tasks. Labor costs include wages, benefits, training, and other related expenses.
• Regulatory compliance expenses: USDP must comply with various federal, state, and local regulations governing rail transportation, environmental protection, workplace safety, and other areas. This may involve compliance monitoring, reporting, training, and remediation efforts to ensure legal and ethical business practices.

By managing and optimizing these cost elements, USDP can enhance its operational efficiency, profitability, and competitive position in the rail transportation industry.

Revenue Streams

USD Partners LP generates revenue through a variety of streams related to its terminal services and midstream infrastructure. These revenue streams include:

• Terminal service fees: USD Partners LP charges terminal service fees to customers who utilize its facilities for transloading, storing, and distributing petroleum and other liquids. These fees are based on the volume of product handled by the terminals and the services provided.
• Transportation fees: In addition to terminal service fees, USD Partners LP also generates revenue from transportation fees. These fees are charged to customers who use the partnership's transportation assets, such as pipelines, for the movement of products to and from its terminals.
• Storage fees: USD Partners LP offers storage services to customers who require temporary or long-term storage of their products. Customers are charged storage fees based on the volume of product stored and the duration of storage.
• Long-term leasing contracts: Another source of revenue for USD Partners LP comes from long-term leasing contracts. These contracts involve leasing out terminal space, transportation assets, or storage facilities to customers for an extended period of time in exchange for fixed rental payments.