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May 10, 2010 6:00 AM, EDT

Tank Truck Industry Faces Unique Challenges with More Regulations, Expenses, Officials Say

By Mindy Long, Special to Transport Topics

This story appears in the May 10 print edition of Transport Topics.

The tank truck industry faces a unique set of challenges that have led to increased regulations, self-imposed safety precautions and higher costs. Industry executives said they are adjusting by embracing new technology, providing additional driver training and re-examining their operations.

“We are — and should be — among the most, if not the most, heavily regulated parts of the industry because of what we haul,” said John Conley, president of National Tank Truck Carriers. “We face all the same issues as the rest of the trucking industry, and then we have our unique world that has been flavored by both safety and security.”

Tank truck executives, who are gathering in Chicago this week for NTTC’s annual Conference & Tank Truck Equipment Show, said shippers expect them to go above and beyond federal safety requirements, which is why they are working to reduce rollovers and improve the security of their equipment and drivers.

“It is a ticket to the dance,” said Jim D’Alessio, vice president of marketing and business development for Trimac Transportation System, a bulk carrier headquartered in Calgary, Alberta, Canada. “I would like to say there is a value-added in those things, but the client expects it and the savings is in reduced costs in insurance and accidents.”

Although carriers couldn’t quantify exactly how much extra they spend on additional safety measures, many of them chalked it up to the cost of doing business.

For example, the Federal Motor Carrier Safety Administration will require only a small number of fleets to install electronic onboard recorders to monitor drivers’ hours-of-service, beginning in June 2012. Yet many tankers already are embracing the devices voluntarily.

“We have made a strategic decision, and we’re moving very rapidly to EOBRs,” said George Grossardt, vice president and general manager of Schneider National Bulk Carriers, Green Bay, Wis. Schneider will have EOBRs installed on its entire fleet of vehicles by the end of the year.

Similarly, Trimac will have EOBRs installed on all its units by August. The fleet already tracks critical-event reporting with Qualcomm devices and receives a notice within minutes of hard-braking or roll-stability events.

“Branch managers are reviewing [the data] continuously, and we have a monthly manager meeting to make sure they are taking the actions needed with the poorer performers,” said Neil Voorhees, Trimac’s U.S. director of safety and security in Houston.

The high center of gravity of tank trucks and the sloshing of liquid cargo mean tank truck drivers face more risks of rollovers than dry van drivers. When a tanker is carrying flammable or hazardous materials, the dangers increase.

The National Highway Traffic Safety Administration is studying heavy vehicle rollovers. In December, a provision added to the House Transportation and Infrastructure Committee’s Hazardous Transportation Safety Act of 2009, which has yet to pass, called for the Department of Transportation to report its efforts to address the issue of tank rollovers.

However, the industry isn’t waiting for the government to act.

Most carriers now spec equipment with electronic stability controls, and many major trailer manufacturers, including Heil Trailer International, Athens, Tenn., and Polar Tank Trailer, Holdingford, Minn., offer roll stability as a standard feature.

Polar said it also offers fuel trailers with a lower center of gravity, which can reduce the risk of rollovers, and is expanding the same concept into its other models.

Polar said its base model trailers start at $50,000, and an average trailer is about $80,000.

Technology aside, driver training may do the most to reduce rollovers. A 2007 DOT study concluded that more than 75% of rollover accidents are the result of driver inattention or error. The study also found that 1,265 cargo tank rollovers occur annually and that these rollovers account for 31% of fatal heavy-vehicle crashes.

As a result, the NTTC, American Trucking Associations and FMCSA will launch an educational video this summer featuring driver testimonials, information on vehicle dynamics and graphics demonstrating how liquids move in a tank.

“It reinforces that speed and hurrying are the main culprits,” Conley said. FMCSA will mail the video to 21,000 companies and offer it online.

“Driver training and the process of product handling escalate in the tank truck industry, particularly if you’re hauling hazardous products,” Trimac’s D’Alessio said.

Drivers at food hauler LCL Bulk Transport Inc., Green Bay, Wis., are expected to ensure a product’s integrity from shipper to receiver. The kosher-certified company already adheres to food-grade quality practices but may face new regulations.

On April 30, the Food and Drug Administration published an Advanced Notice of Proposed Rulemaking to implement the Safe Food Transportation Act of 2005.

Conley said the regulation will have a significant effect on the tank transportation of food products. He is reviewing the rule and its effects on carriers.

“One of the first questions we will have to determine is how FDA will define food,” Conley said. “A very broad definition would impact carriers beyond the obvious products and could include chemicals or other products used in food production, preservation, packaging, etc.”

Part of LCL Bulk Transport’s current process for ensuring product integrity requires drivers to climb on top of tanks daily to check seals. Climbing 13 feet off the ground creates safety risks the industry is working to address.

LCL President Hans Schaupp said he believes there is a great opportunity to “create a different platform in the future to change how that process works.”

In early April, tank manufacturer Brenner Tank LLC brought together major shippers, large carriers and wash-rack operators to discuss the issue at its headquarters in Fond du Lac, Wis.

The group plans to identify solutions to enhance worker safety and improve tank design.

John Cannon, vice president of engineering for Walker Group Holdings, New Lisbon, Wis., manufacturer of Brenner Tank Trailers, said the issue is gaining momentum. 

“I feel we have a critical mass now and, hopefully, we can find a solution within the industry,” he said. 

Schneider’s Grossardt said he also would like to see the government clarify potentially confusing regulations for falls from trucks.

“When that happens at a fixed location, such as a loading rack, [Occupational Safety and Health Administration] rules govern the safety. Once you leave the gate, OSHA regulations don’t apply, DOT rules apply and DOT is silent with fall protection,” he said.

Another issue receiving scrutiny from legislators involves the transportation of flammable liquids in the unprotected product piping that is used to unload product, often called wetlines.

Although a wetlines measure was included in the hazmat safety bill, which is still stalled, NTTC’s Conley said DOT may do some rulemaking this summer.

“It will probably require that any new trailer built after a certain date not have wetlines and require retrofits after a certain number of years,” he said.

Depending on the specifications of the rule, it could be costly. Conley told Transport Topics that technology could add $3,000 to $4,000 to the cost of new trailer, and retrofits could cost $8,000 to $10,000.

“The only way the system will be used is if it is mandated by the DOT,” he said.

The industry could face additional costs, such as downtime during retrofits and wait times when wetlines are cleared after loading and unloading, which could take eight to nine minutes per cycle.

“With four loads a day, that is 30 to 35 minutes,” said Rich Moskowitz, regulatory affairs counsel for ATA. “We’re confident that, if the agency does an honest assessment of the cost and benefit, they will see that the costs far outweigh the benefit,”

The higher operating costs that tankers face and the tight economy have been hard on some carriers.

“I think there are going to be some people that decide to exit because of the challenges we’ve had and the lack of a reasonable return on investment,” said Greg Hodgen, president of Groendyke Transport Inc., Enid, Okla.

Carriers leaving will create growth opportunities for those that remain.

So far this year, Kenan Advantage Group Inc., one of the largest bulk carriers for the petroleum industry, has acquired two businesses.

In a written statement, Kenan, North Canton, Ohio, said its acquisition of Don E. Keith Trucking, a Bakersfield, Calif.-based bulk transporter of asphalt, fuel, crude oil and lubricants, would allow it to diversify its offerings on the West Coast. Kenan also reached a fleet conversion agreement with DeWitt Petroleum, South El Monte, Calif., and will now serve its customers in Southern California.

Mary Wilson, president of DeWitt Petroleum, said new requirements from the California Air Resources Board made “it incredibly difficult to economically maintain this portion of our business.”

Although fleets and drivers will remain subject to a number of costly federal regulations, DOT is making an effort to simplify some of its processes.

On May 1, DOT’s Pipeline and Hazardous Materials Safety Administration launched an online application process, so it can review hazardous materials special permits more efficiently.

In the past, applications were submitted via mail, e-mail or fax. The new system will accept applications 24 hours a day and provide immediate confirmation of an application and a tracking number. 

“This automated application system is part of an officewide modernization effort in the Office of Hazardous Materials Safety.” PHMSA Administrator Cynthia Quarterman said.