Delek Logistics Partners, LP (DKL): Business Model Canvas

Key Partnerships

Delek Logistics Partners, LP (DKL) has established key partnerships with various entities to ensure the smooth operation of its business model. These partnerships play a crucial role in the success of DKL and help in achieving its strategic objectives. The key partnerships of DKL include:

One of the most significant partnerships of DKL is with its parent company, Delek US Holdings. This strategic alliance provides DKL with access to Delek US Holdings' assets, infrastructure, and resources. It also ensures a seamless flow of operations between the two entities, allowing DKL to leverage the expertise and capabilities of Delek US Holdings in the oil and petroleum industry.

DKL has established partnerships with various oil and petroleum suppliers to ensure a stable and reliable supply of products. These partnerships enable DKL to secure competitive pricing and favorable terms for the procurement of crude oil and petroleum products. By collaborating with reputable suppliers, DKL can maintain high-quality standards and meet the demand of its customers efficiently.

To facilitate the transportation and distribution of its products, DKL has formed partnerships with transport and logistics companies. These collaborations ensure the timely delivery of oil and petroleum products to customers across different regions. By outsourcing transportation services to reliable partners, DKL can focus on its core operations and enhance its overall efficiency.

DKL has entered into agreements with regional and local pipeline operators to optimize its transportation network. These partnerships enable DKL to access a network of pipelines for the efficient transfer of products between facilities. By leveraging the infrastructure of pipeline operators, DKL can reduce transportation costs, minimize risks, and improve operational flexibility.

Key Activities

Delek Logistics Partners, LP (DKL) engages in a variety of key activities to support its business model:

• Transportation of crude oil and refined products: One of the primary activities of DKL is the transportation of crude oil and refined products through its network of pipeline systems. This involves ensuring the safe and efficient delivery of products to various destinations.
• Operation and maintenance of pipeline systems: DKL is responsible for the operation and maintenance of its pipeline systems to ensure they are in optimal working condition. This includes conducting regular inspections, repairs, and upgrades to maintain the integrity of the infrastructure.
• Storage of petroleum products: DKL also provides storage services for petroleum products at its terminals. This involves managing inventory levels, handling product transfers, and maintaining proper storage conditions to meet customer demand.
• Logistics and supply chain management: DKL plays a crucial role in managing the logistics and supply chain of petroleum products. This includes coordinating transportation schedules, optimizing routes, and overseeing the movement of products from point of origin to final destination.

Overall, these key activities form the foundation of DKL's operations and are essential for ensuring the smooth and efficient flow of petroleum products within its supply chain.

Key Resources

Delek Logistics Partners, LP (DKL) relies on a set of key resources to facilitate its operations and deliver value to its customers. These resources play a critical role in the company's ability to efficiently transport, store, and distribute various energy products across key geographic regions.

• Pipeline infrastructure: DKL owns and operates a vast network of pipelines that span across key geographic regions, allowing for the efficient transportation of crude oil, refined products, and other energy products. This infrastructure is a vital resource that enables the company to deliver products to its customers in a timely and cost-effective manner.
• Storage facilities: DKL's storage facilities include tanks and terminals strategically located near major refineries and distribution centers. These facilities provide the company with the capacity to store large quantities of energy products, ensuring that it can meet the demands of its customers even during periods of high demand or supply disruptions.
• Fleet of transport vehicles and equipment: DKL maintains a fleet of transport vehicles, including trucks, railcars, and barges, as well as specialized equipment for handling and transporting energy products. This fleet allows the company to efficiently move products from production facilities to storage terminals and distribution centers, ensuring a seamless supply chain operation.
• Skilled operational and logistical workforce: DKL's workforce consists of skilled professionals with expertise in operations, logistics, and the energy industry. These individuals play a key role in managing the company's operations, optimizing its supply chain, and ensuring that products are delivered safely and efficiently to customers.

Value Propositions

Delek Logistics Partners, LP (DKL) prides itself on its ability to provide reliable and efficient transportation services for oil and petroleum products. With a robust network of pipelines and storage facilities, DKL ensures that products are delivered promptly and securely to their destinations.

One of DKL's key value propositions is its extensive pipeline and storage infrastructure. This infrastructure allows DKL to transport large volumes of oil and petroleum products quickly and efficiently, reducing transportation costs for clients and ensuring timely delivery of products.

DKL places a strong emphasis on safety and quality in all of its operations. From stringent inspection procedures to regular maintenance and monitoring, DKL ensures that all products are transported in a safe and secure manner, meeting the highest industry standards.

DKL understands that each client has unique logistics requirements, which is why the company offers customized solutions tailored to meet specific needs. Whether it's designing a bespoke transportation plan or implementing special handling procedures, DKL works closely with clients to deliver solutions that align with their business objectives.

Customer Relationships

Delek Logistics Partners, LP (DKL) prides itself on building and maintaining strong relationships with its customers in the energy industry. The company focuses on providing excellent customer service and support to ensure that clients receive the best possible logistics solutions for their specific needs.

• Long-term contracts with energy companies: DKL establishes long-term contracts with energy companies to provide consistent and reliable logistics services. These contracts help build trust and loyalty between DKL and its customers, ensuring a stable partnership over time.
• Responsive customer support services: DKL offers responsive customer support services to address any issues or concerns that customers may have. Whether it's answering questions, resolving problems, or providing guidance, DKL's customer support team is dedicated to ensuring a positive experience for all clients.
• Technical and operational support: DKL provides technical and operational support to help customers optimize their logistics processes and improve efficiency. From equipment maintenance to route planning, DKL's team of experts is available to assist customers in achieving their logistics goals.
• Regular updates and communication regarding logistics operations: DKL maintains open communication with customers by providing regular updates on logistics operations. From shipment status to delivery schedules, customers are kept informed every step of the way, allowing for greater transparency and efficiency in the logistics process.

Channels

Delek Logistics Partners, LP's business model relies on utilizing multiple channels to reach customers and build relationships. These channels include:

• Direct sales teams: Delek Logistics Partners, LP employs sales teams to directly engage with potential customers and provide information about their services. These teams build relationships with clients and work to understand their unique needs.
• Company-owned website for service information: The company's website serves as a central hub for customers to learn about Delek Logistics Partners, LP's services, pricing, and contact information. This online presence allows for easy access to important information and simplifies the process of reaching out to the company.
• Industry conferences and trade shows: Delek Logistics Partners, LP actively participates in industry conferences and trade shows to showcase their services and network with potential clients. These events provide valuable opportunities to connect with industry professionals and stay up-to-date on the latest trends and innovations.
• Direct engagement through operational sites: Delek Logistics Partners, LP also engages directly with customers through their operational sites. This hands-on approach allows the company to build strong relationships with clients and address any concerns or issues in real-time.

Customer Segments

Delek Logistics Partners, LP (DKL) serves a variety of customers within the oil and gas industry, catering to their specific needs and requirements. The following are the primary customer segments that DKL targets:

• Oil and gas production companies: DKL provides infrastructure and logistics services to oil and gas production companies, helping them transport their products to refineries and other destinations. DKL's services help these companies streamline their operations and minimize transportation costs.
• Refineries and petroleum distributors: DKL also caters to refineries and petroleum distributors, offering them a range of services such as storage, transportation, and logistics solutions. By partnering with DKL, these entities can ensure a smooth and efficient supply chain for their products.
• Industrial users of petroleum products: DKL serves industrial customers who rely on petroleum products for their operations. By providing reliable transportation and storage services, DKL helps these customers meet their production requirements and maintain a steady supply of raw materials.
• Retail gas stations and other end retailers: DKL works with retail gas stations and other end retailers to ensure a consistent supply of fuel products to meet consumer demand. By partnering with DKL, these retailers can optimize their supply chain and improve their operational efficiency.

Cost Structure

Operational and maintenance costs for pipelines and equipment: Delek Logistics Partners, LP incurs significant costs for the operational and maintenance of its pipelines and equipment. This includes regular inspections, repairs, and upgrades to ensure the integrity and reliability of the infrastructure. These costs are essential to ensure the safe transportation of products and to meet regulatory requirements.

Labor and staffing expenses: Another significant cost for Delek Logistics Partners, LP is labor and staffing expenses. The company requires skilled personnel to operate and maintain the pipelines, terminals, and other infrastructure. This includes employees in various roles such as operations, maintenance, safety, and administration. These expenses are necessary to ensure the smooth and efficient functioning of the business.

Capital investment in infrastructure development: Delek Logistics Partners, LP also incurs costs related to capital investment in infrastructure development. This includes the construction of new pipelines, terminals, and storage facilities, as well as the expansion or upgrade of existing assets. These investments are crucial for the growth and diversification of the business and to meet the changing demands of customers and the market.

Regulatory compliance and safety management costs: Compliance with regulations and safety management are top priorities for Delek Logistics Partners, LP, and entail significant costs. The company must adhere to various regulations related to environmental protection, pipeline safety, and operational standards. This involves investing in monitoring systems, training programs, audits, and other initiatives to ensure compliance and mitigate risks. These costs are essential to protect the environment, maintain public safety, and uphold the company's reputation.

• Operational and maintenance costs for pipelines and equipment
• Labor and staffing expenses
• Capital investment in infrastructure development
• Regulatory compliance and safety management costs

Revenue Streams

Delek Logistics Partners, LP generates revenue through various streams related to its transportation and logistics services, storage facilities, and joint ventures. The primary sources of revenue for the company include:

• Fees from transportation and logistics services: DKL earns revenue by providing transportation services for crude oil, intermediate, and refined products. This includes transportation via pipelines, trucks, and terminals. Customers pay fees based on the volume of products transported and the distance covered.
• Storage service charges: DKL generates revenue by offering storage facilities for crude oil, refined products, and other commodities. Customers pay storage fees based on the amount of space rented and the duration of storage.
• Long-term leasing of pipeline and storage facilities: DKL enters into long-term leasing agreements with customers for the use of its pipeline and storage facilities. These agreements provide a stable source of revenue for the company over an extended period.
• Management fees from joint ventures and alliances: DKL earns management fees from its joint ventures and alliances with other companies in the energy and logistics industry. These partnerships allow DKL to expand its service offerings and generate additional revenue streams.