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April 25, 2011 5:00 AM, EDT

More Freight, Fewer Carriers Boost Tankers, Fleets Say

By Jonathan S. Reiskin, Associate News Editor

This story appears in the April 25 print edition of Transport Topics.

Several tank-truck operators said freight volumes are increasing and rates are moving higher thanks to the combination of that higher level of demand and lower capacity on the carrier side.

The spot market for last-minute loads is doing particularly well, but executives at several shippers said there are plenty of trucks available for companies that plan contractual relationships in advance.

Federal regulations concerning safety and driver hours are also helping to constrict freight-hauling capacity, fleet managers said, adding that worries about the availability of well-qualified drivers will soon climb on their list of concerns.

“I’ve been in tank trucks since 1968, and the last time it was this busy and this strange was the 1970s,” said Steve Rush, president of Carbon Express, Wharton, N.J. With a staff of 54 drivers, Carbon Express hauls liquid bulk loads, especially motor oils, resins and solvents.

Rush, who is also chairman of the National Tank Truck Carriers, said his company is getting requests to move loads of base oils faster than he can deliver them, and that load boards are offering favorable pricing.

“We’re not back at pre-recession metrics yet, but we’re getting close. The progress we made last year continues,” said George Grossardt, general manager of bulk transportation for Schneider National, Green Bay, Wis.

“Our load volumes are strong,” Grossardt said. Revenue is coming in at least 10% faster than a year ago, and he said he expects that rate of increase to continue.

Grossardt said his 1,000 trucks do not do much spot-market work, but he has noticed that pricing there is on the upswing. While his shippers are doing better, he acknowledged that is coinciding with a contraction in the supply of trucks.

“Supply is a piece of the equation, and I can’t tell you exactly how much, but combined with the improvements in demand, it just feels a lot better than before,” Grossardt said.

“Load by load, it is pretty tight now,” said Wayne Johnson, manager of carrier relations for Owens Corning, Toledo, Ohio. “But we mainly do tank trucks with dedicated contract carriage in five-year contracts, and I just got 23 different carriers to file bids for that work.”

In addition to managing Owens Corning’s $500 million annual transportation budget, Johnson is the chairman of the highway transportation committee of the National Industrial Transportation League.

In his most recent report on tonnage, Bob Costello, American Trucking Associations’ chief economist, said tank trucks were one of the prime movers of the index. He said tank carriers haul among the heaviest of loads, and that has caused the tonnage index to rise.

Tom Hansen, manager of bulk logistics procurement at Odyssey Logistics & Technology Corp., Danbury, Conn., said that, after a capacity pinch last year, managers have been working with shippers to get them to plan ahead.

Executives at the third-party logistics provider took a contrary position to the argument that tank-truck capacity is tight, saying that while business is doing well, it was actually better a year ago.

“Last year was all hands on deck; it caught us off guard,” said Warren Hoppmeyer, an Odyssey vice president. “There was a general restocking of inventory in addition to the normal business.”

The 3PL company also is a broker, and bulk transportation is one of its specialty areas.

Tom Voelkel, chief operating officer of Dupré Logistics, Lafayette, La., said his carrier’s tank-truck business is running ahead of last year’s pace, but he’s mainly worried about clouds on the industry’s horizon.

“We need to attract new people into the industry as drivers and replace our older assets [trucks] that will cost more than they did a few years ago,” Voelkel said, adding that tank-truck drivers need much more training than the average commercial driver.

Most tank-truck companies, he said, employ a driver force that’s 100% hazmat-certified. The workers also must know how to operate the wetlines hardware under the tanks of their trucks as well as the loading systems at shippers’ depots.

“If you can fill up at the Exxon rack, it doesn’t mean you know how to do it at Marathon down the road. They’re all different and have their own requirements,” Voelkel said. He said Dupré uses veteran drivers to teach new hires how to use the equipment.