Global Partners LP (GLP): Business Model Canvas [11-2024 Updated]
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Global Partners LP (GLP) Bundle
In the dynamic world of energy distribution, Global Partners LP (GLP) stands out with a robust business model that integrates diverse operations across the East Coast. This blog post delves into the Business Model Canvas of GLP, exploring its key partnerships, activities, and resources that drive its success. Discover how GLP effectively addresses customer needs through innovative value propositions and a well-structured revenue model, all while maintaining a commitment to sustainability and operational excellence.
Global Partners LP (GLP) - Business Model: Key Partnerships
Collaborations with fuel suppliers
Global Partners LP maintains strategic collaborations with various fuel suppliers to ensure a consistent supply of petroleum products. As of September 30, 2024, the Partnership had positive exchange balances with suppliers amounting to $3.8 million and negative exchange balances of $27.2 million. These agreements allow for flexibility in inventory management and pricing strategies based on market conditions.
Joint ventures for terminal operations
In 2024, Global Partners LP engaged in a joint venture through Everett Landco, LLC, aimed at acquiring and developing a former ExxonMobil terminal site in Everett, Massachusetts. The Partnership's investment in this joint venture was recorded at $15.8 million as of September 30, 2024. This collaboration is critical for expanding terminal operations and enhancing logistical capabilities in the region.
Partnerships with convenience store operators
Global Partners LP collaborates with convenience store operators to enhance its retail offerings. The Partnership reported $150.9 million in sales from station operations for the three months ended September 30, 2024. These partnerships are essential for driving foot traffic to gas stations and increasing ancillary sales from convenience store products.
Strategic alliances with transportation providers
Strategic alliances with transportation providers are vital for Global Partners LP's distribution network. The Partnership's total sales in the Wholesale Segment reached $2.7 billion for the three months ended September 30, 2024, with a significant portion attributed to efficient logistics and transportation strategies. These alliances help mitigate risks associated with supply chain disruptions and optimize delivery processes.
Global Partners LP (GLP) - Business Model: Key Activities
Distribution of refined petroleum products
The wholesale segment of Global Partners LP generated sales of approximately $2.724 billion for the three months ended September 30, 2024, compared to $2.329 billion for the same period in 2023. This segment includes sales of gasoline and gasoline blendstocks amounting to $1.790 billion and distillates and other oils totaling $933.9 million.
Operation of gasoline stations and convenience stores
In the gasoline distribution and station operations segment, sales reached $1.421 billion for the three months ended September 30, 2024, down from $1.617 billion in the same period of 2023. The product margin for gasoline sales was $164.1 million. Convenience store operations contributed approximately $150.9 million in sales.
Managing logistics and supply chain
Global Partners LP has a total of 4,200 miles of pipelines and operates 30 terminals. The logistics and supply chain management are crucial for maintaining efficient operations and timely deliveries of refined petroleum products. The partnership has entered into exchange agreements for petroleum products, which included positive exchange balances of $3.8 million and negative balances of $27.2 million as of September 30, 2024.
Conducting acquisitions of terminals
In April 2024, Global Partners LP completed the acquisition of four refined-product terminals from Gulf Oil for approximately $215 million, excluding inventory. This strategic move enhances their terminal network capabilities and supports their distribution operations in key markets.
| Activity | Q3 2024 Sales (in millions) | Q3 2023 Sales (in millions) | Product Margin (in millions) |
|---|---|---|---|
| Wholesale Segment | $2,724 | $2,329 | $71.1 |
| Gasoline Distribution and Station Operations | $1,421 | $1,617 | $237.7 |
| Convenience Store Operations | $150.9 | N/A | N/A |
| Acquisition of Terminals | $215 | N/A | N/A |
Global Partners LP (GLP) - Business Model: Key Resources
Extensive terminal network across the East Coast
Global Partners LP operates a robust network of 25 refined product terminals acquired from Motiva Enterprises in December 2023, and four additional terminals acquired from Gulf Oil in April 2024. This extensive terminal network enhances its operational capacity along the East Coast, facilitating efficient distribution and storage of petroleum products.
Fleet for transporting petroleum products
The company maintains a dedicated fleet for the transportation of petroleum products, ensuring reliable delivery and logistics management. This fleet supports the distribution of approximately 4.9 billion gallons of product sold in the nine months ended September 30, 2024, which reflects a significant increase from 4.1 billion gallons in the same period of 2023.
Skilled workforce in operations and management
Global Partners LP employs a skilled workforce, with total personnel costs amounting to $55.1 million for the three months ended September 30, 2024, reflecting an increase from $36.4 million in the same period of 2023. These skilled employees are crucial for operational efficiency and management of the company’s complex logistics and distribution networks.
Financial resources for acquisitions and expansions
As of September 30, 2024, Global Partners LP had total borrowings of $396.2 million under its credit facilities, with a total remaining availability for borrowings and letters of credit amounting to $1.09 billion. The company utilized financial resources to fund acquisitions such as the $215 million purchase of Gulf Oil terminals, enhancing its asset base and operational capabilities.
| Key Resource | Details | Financial Impact |
|---|---|---|
| Terminal Network | 25 terminals from Motiva; 4 from Gulf Oil | Increased operational capacity, facilitating 4.9 billion gallons sold |
| Transportation Fleet | Dedicated fleet for petroleum product transport | Supports logistics for increased sales volume |
| Skilled Workforce | Personnel costs of $55.1 million (Q3 2024) | Increased operational efficiency and management |
| Financial Resources | Total borrowings of $396.2 million; $1.09 billion available | Funding for acquisitions and expansions |
Global Partners LP (GLP) - Business Model: Value Propositions
Reliable supply of gasoline and renewable fuels
Global Partners LP ensures a consistent and dependable supply of gasoline and renewable fuels. For the three months ended September 30, 2024, the Partnership reported sales of gasoline and gasoline blendstocks totaling $1,790,302 thousand, an increase from $1,614,459 thousand in the same period of 2023. For the nine months ending September 30, 2024, sales reached $4,909,560 thousand, compared to $4,213,536 thousand in 2023.
Access to a large network of service stations
The Partnership operates a robust network of 1,589 gasoline stations as of September 30, 2024, including 306 directly operated convenience stores. This extensive network is primarily located in the Northeast United States, enhancing accessibility for customers.
Commitment to sustainability and renewable energy sources
Global Partners LP is actively engaged in the distribution of renewable fuels, having sold approximately $4.2 billion of refined petroleum products and renewable fuels for the three months ended September 30, 2024. This commitment reflects the Partnership's strategy to align with increasing consumer demand for sustainable energy solutions.
Comprehensive logistics capabilities
The Partnership boasts comprehensive logistics capabilities, facilitating the efficient transportation of petroleum products. It operates terminals with connectivity to rail, pipeline, and marine assets, contributing to its ability to manage a diverse range of fuel products. The total assets of Global Partners LP were reported at $3,665,115 thousand as of September 30, 2024.
| Value Proposition | Key Metrics |
|---|---|
| Reliable supply of gasoline and renewable fuels | Q3 2024 Gasoline Sales: $1,790,302 thousand |
| Q3 2023 Gasoline Sales: $1,614,459 thousand | |
| 9M 2024 Gasoline Sales: $4,909,560 thousand | |
| 9M 2023 Gasoline Sales: $4,213,536 thousand | |
| Access to a large network of service stations | Total Gasoline Stations: 1,589 |
| Directly Operated Convenience Stores: 306 | |
| Commitment to sustainability | Q3 2024 Total Sales of Refined Products: $4.2 billion |
| Comprehensive logistics capabilities | Total Assets: $3,665,115 thousand |
Global Partners LP (GLP) - Business Model: Customer Relationships
Customer loyalty programs at convenience stores
Global Partners LP operates a variety of convenience stores that implement customer loyalty programs to enhance customer retention and increase sales. These programs typically offer rewards for frequent purchases, which can be redeemed for discounts or free products. In 2024, the company reported a revenue of $430.6 million from its station operations segment for the nine months ended September 30, 2024, demonstrating the effectiveness of these programs in driving customer engagement.
Responsive customer service for commercial accounts
The company prioritizes responsive customer service for its commercial accounts, which include businesses that rely on fuel and related products. For the three months ended September 30, 2024, sales from the commercial segment were $277.1 million, reflecting a 1% increase compared to the previous year. The product margin for this segment was $9.5 million, up 13% year-over-year, indicating that effective customer service strategies are contributing to improved profitability.
Engagement through digital platforms for promotions
Global Partners LP leverages digital platforms to engage customers with targeted promotions and advertising. This includes online platforms for loyalty rewards, promotions, and customer feedback. The company’s total sales from gasoline distribution were $1.2 billion for the three months ended September 30, 2024, showcasing the potential impact of digital engagement on sales performance.
| Quarter Ended | Total Sales (in millions) | Product Margin (in millions) |
|---|---|---|
| September 30, 2024 | $1,200 | $164.1 |
| September 30, 2023 | $1,400 | $132.0 |
Regular communication with partners and suppliers
Regular communication with partners and suppliers is a cornerstone of Global Partners LP’s customer relationship strategy. This ensures that supply chain operations run smoothly and that customer needs are met promptly. The company has reported an increase in gross profit to $286 million for the third quarter of 2024, up 25% from the previous year, which can be attributed to effective coordination with its partners.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Gross Profit (in millions) | $286.0 | $228.5 |
| Increase (%) | 25% | - |
Global Partners LP (GLP) - Business Model: Channels
Direct sales through gas stations and convenience stores
Global Partners LP operates a network of 1,589 gasoline stations, including 306 directly operated convenience stores as of September 30, 2024. The revenue from station operations was $150.9 million for the three months ended September 30, 2024, compared to $156.7 million for the same period in 2023, reflecting a decrease of 4%. For the nine months ended September 30, 2024, the revenue was $430.6 million, slightly down from $431.9 million in 2023.
Online platforms for B2B transactions
Global Partners LP utilizes online platforms to facilitate B2B transactions, particularly in the wholesale distribution of petroleum products. The total sales from wholesale gasoline and gasoline blendstocks were $4.9 billion for the nine months ended September 30, 2024, an increase of 17% from $4.2 billion in 2023, primarily due to an increase in volume sold.
Partnerships for distribution to commercial customers
The partnerships formed by Global Partners LP enhance its distribution network for commercial customers. For the three months ended September 30, 2024, commercial sales amounted to $277.1 million, slightly up from $273.8 million in the same period in 2023. For the nine months ended September 30, 2024, commercial sales increased to $836.7 million from $758.2 million in 2023.
Marketing through local advertising and promotions
Global Partners LP engages in local advertising and promotions to drive traffic to its gas stations and convenience stores. Marketing efforts are reflected in the sales from gasoline distribution, which were $1.2 billion for the three months ended September 30, 2024, compared to $1.4 billion in the same period in 2023, indicating a decrease primarily due to price and volume variations.
| Channel | Revenue (3 Months Ending Sept 30, 2024) | Revenue (3 Months Ending Sept 30, 2023) | Revenue (9 Months Ending Sept 30, 2024) | Revenue (9 Months Ending Sept 30, 2023) |
|---|---|---|---|---|
| Gas Station Sales | $150.9 million | $156.7 million | $430.6 million | $431.9 million |
| Wholesale Gasoline | $1.8 billion | $1.6 billion | $4.9 billion | $4.2 billion |
| Commercial Sales | $277.1 million | $273.8 million | $836.7 million | $758.2 million |
| Gasoline Distribution | $1.2 billion | $1.4 billion | $3.7 billion | $4.0 billion |
Global Partners LP (GLP) - Business Model: Customer Segments
Retail consumers at gas stations
The retail consumer segment primarily consists of individuals purchasing gasoline and convenience store items at gas stations operated by Global Partners LP. In the third quarter of 2024, the Gasoline Distribution and Station Operations segment generated approximately $1.42 billion in sales, reflecting a slight decrease from $1.62 billion in the same period of 2023. The product margin from gasoline sales for this segment was approximately $237.7 million as of September 30, 2024.
Commercial customers in the energy sector
Global Partners LP serves commercial customers within the energy sector, providing petroleum products and related services. For the nine months ended September 30, 2024, the Commercial segment reported sales of $836.7 million, up from $758.2 million during the same period in 2023. The product margin for this segment was approximately $22.7 million.
Wholesalers and distributors of petroleum products
Global Partners LP also targets wholesalers and distributors of petroleum products. In the third quarter of 2024, the Wholesale segment achieved sales of $2.72 billion, an increase from $2.33 billion in the same quarter of 2023. The product margin for this segment was $71.1 million.
Regional and national retailers
The company collaborates with regional and national retailers to distribute its products. For the nine months ending September 30, 2024, total sales from contracts with customers in this category amounted to $12.98 billion, with a gross profit of $789.1 million.
| Customer Segment | Sales (Q3 2024) | Sales (Q3 2023) | Product Margin (Q3 2024) |
|---|---|---|---|
| Retail consumers at gas stations | $1.42 billion | $1.62 billion | $237.7 million |
| Commercial customers in the energy sector | $836.7 million | $758.2 million | $22.7 million |
| Wholesalers and distributors | $2.72 billion | $2.33 billion | $71.1 million |
| Regional and national retailers | $12.98 billion | N/A | $789.1 million |
Global Partners LP (GLP) - Business Model: Cost Structure
Operating expenses for station and terminal maintenance
The operating expenses for Global Partners LP (GLP) were $387.2 million for the nine months ended September 30, 2024, compared to $334.7 million for the same period in 2023, reflecting an increase of $52.5 million or 16%. This increase is primarily associated with terminal operations, largely due to the acquisitions of the Motiva Terminal Facilities and the Gulf Terminals.
Transportation and logistics costs
Transportation and logistics costs are a significant component of GLP's cost structure. The company incurred $4,136.2 million in cost of sales for the nine months ended September 30, 2024, which includes logistics expenses related to the transportation of petroleum products.
Marketing and advertising expenditures
Marketing and advertising expenditures for GLP are included within the selling, general and administrative (SG&A) expenses. For the nine months ended September 30, 2024, SG&A expenses totaled $212.6 million, up from $192.4 million in the same period of 2023, marking a 10% increase.
Administrative and personnel costs
Administrative and personnel costs have also seen an increase, with GLP reporting payroll and related expenses of $165.4 million for the nine months ended September 30, 2024, compared to $117.9 million for the same period in 2023. These costs include expenses incurred for employee wages, benefits, and other related expenses.
| Cost Category | Amount (2024) | Amount (2023) | Change (%) |
|---|---|---|---|
| Operating Expenses (Total) | $387.2 million | $334.7 million | 16% |
| Cost of Sales (including Transportation) | $4,136.2 million | $3,992.5 million | 3.6% |
| SG&A Expenses | $212.6 million | $192.4 million | 10% |
| Administrative and Personnel Costs | $165.4 million | $117.9 million | 40.4% |
Global Partners LP (GLP) - Business Model: Revenue Streams
Sales of gasoline and petroleum products
Global Partners LP generates substantial revenue through the sale of gasoline and petroleum products. For the three months ended September 30, 2024, gasoline and gasoline blendstocks sales amounted to $1,790,302,000, while distillates and other oils accounted for $933,908,000. This results in a total sales figure of $2,724,210,000 for the wholesale segment in the same period. For the nine months ended September 30, 2024, total sales from gasoline and gasoline blendstocks were $4,909,560,000 and $3,116,686,000 from distillates and other oils, culminating in an overall total of $8,026,246,000.
Convenience store sales and prepared food services
The partnership also earns revenue through its convenience store operations and prepared food services. For the three months ended September 30, 2024, the sales from station operations reached $150,943,000. In the nine months of the same year, it totaled $430,636,000. This segment contributes to the overall performance of the Gasoline Distribution and Station Operations segment, which had total sales of $1,420,898,000 for Q3 2024.
Rental income from leased properties
Global Partners LP also derives revenue from rental income associated with its leased properties. In the three months ended September 30, 2024, revenue from leases was $22,018,000, with $651,000 from wholesale and $21,367,000 from the Gasoline Distribution and Station Operations segment. Over the nine months, rental income totaled $65,004,000, consisting of $2,232,000 from wholesale and $62,772,000 from the GDSO segment.
Incentive distributions from joint ventures
In addition to its primary revenue streams, Global Partners LP receives incentive distributions from joint ventures. For the three months ended September 30, 2024, the total cash distributions on common units were approximately $26.8 million, with expected distributions in subsequent quarters increasing to $28.2 million by August 2024. The annualized cash distribution per unit was projected at $2.92, reflecting the partnership's ability to exceed its target distribution levels.
| Revenue Stream | Q3 2024 Revenue (in $000) | 9M 2024 Revenue (in $000) |
|---|---|---|
| Gasoline and petroleum products sales | 2,724,210 | 8,026,246 |
| Convenience store sales and prepared food services | 150,943 | 430,636 |
| Rental income from leased properties | 22,018 | 65,004 |
| Incentive distributions from joint ventures | 26,834 | Estimated at 28,159 for Q4 2024 |
Updated on 16 Nov 2024
Resources:
- Global Partners LP (GLP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Global Partners LP (GLP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Global Partners LP (GLP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.