AFTER becoming established in supply chain management, J Darron Eschle decided it was time to build his own business. The big question was what aspect of the transportation industry offered the best opportunities.
In the course of studying possibilities, Eschle realized that there was potential for a niche operation that focused on tank truck transport. The core emphasis would be dedicated contract carriage or private fleet replacement, and the enterprise he envisioned would provide an array of bulk logistics services.
Once the concept was fleshed out, the next step was to find a source of capital that would make the dream a reality. Eschle hit on a novel approach.
“I needed investment help in getting my idea off the ground, so I pitched the concept to several tank truck carriers,” Eschle says. “Bill and Gary Andrews (Andrews Transport Inc) saw the potential, especially the opportunity to obtain long-term contracts with shippers. We worked out a 50/50 arrangement, and Andrews Logistics Inc opened for business in December 1997.
“Financing is just one of the benefits we derive through our connection with Andrews Transport. We also gain from the purchasing power and industry expertise of a larger, well-established organization.”
Growing fleet
Based in Irving, Texas, Andrews Logistics has built up a fleet that includes nearly 150 tractors and more than 200 trailers. About 70 of the trailers are tanks, and the rest are dry vans. The carrier is on an aggressive expansion schedule, and 71 new tractors will be purchased during 2006.
“The new tractors are for both replacement and expansion,” Eschle says. “We're going to have to scramble to keep all of the new equipment busy, but we see a lot of opportunity for this company to grow. I think we'll be able to find plenty of work for the new tractors.”
Growth has been steady over the eight years that Andrews Logistics has been in business. The first bulk shipper was AmeriGas Partners LP, followed by ConocoPhillips.
The logistics company serves AmeriGas with six propane transports that supply retail locations in southern California. On the ConocoPhillips side, Andrews Logistics transports bulk lubricants and natural gas engine oils in dedicated tank trailers operating out of locations in Los Angeles, California; Hartford, Illinois; and Pittsburgh, Pennsylvania.
“ConocoPhillips has become our second largest customer, and our rigs run all over the country transporting lubricants for the oil company,” Eschle says. “We also do some inbound base oil transportation transloading from barges in California ports for ConocoPhillips.
“We certainly proved our ability to meet our customers' needs following the Gulf Coast hurricanes in 2005. We ran longer routes and moved additional loads to help our customer offset temporary supply constraints at their Louisiana plant.”
Other liquid bulk customers include Petra Chemical Company and Matheson Tri-Gas, both of which are in the Dallas-Fort Worth, Texas, area. Through the contract with Petra Chemical, Andrews Logistics transports bulk and packaged shipments of bleach. Assets assigned to Petra Chemical include four drivers, five tractors, and eight tank trailers and three vans.
Andrews Logistics added cryogenic trailers for the Matheson Tri-Gas account. The carrier handles bulk shipments of liquefied oxygen and liquefied nitrogen from the Tri-Gas plant in Irving. The carrier also hauls gas in cylinders out of several Matheson Tri-Gas plants across the country.
“The Tri-Gas business has been a great addition to our operation,” Eschle says. “About six years ago, we heard that Matheson Tri-Gas planned to outsource at four locations. We went after it, and we were awarded the contract for the Irving plant. We bought the trailers they had at that plant and added a couple more later. We now have nine trailers, eight tractors, and 12 drivers involved in that operation.”
Van operation
One of the biggest growth opportunities for the young niche logistics provider came in 2000. Andrews Logistics signed up its largest customer — The Bombay Company Inc. As many as 70 tractors and 100 van trailers provide the specialty home furnishings retailer with dedicated service from three distribution centers in California, Georgia, and Pennsylvania.
“I had worked with Bombay's distribution operation previously and stayed in touch with them after starting Andrews Logistics,” Eschle says. “Our opportunity came when they opened a new distribution center in Mira Loma, California. We proved that we could provide reliable service at a good price. We received the contract to serve Bombay's McDonough, Georgia, distribution center in 2001, and we added their new Allentown, Pennsylvania, location 14 months ago.”
Key benefits
One reason Andrews Logistics has been so successful in attracting customers is that it provides them with three key benefits — customized logistics management, well-qualified and professional truck drivers, and fleet equipment that is tailored to each individual transportation niche.
On the management side, an emphasis is placed on the communication process. Andrews Logistics provides very detailed performance reports on a weekly basis. These reports serve as a report card to ensure that each logistics activity is performed effectively and efficiently. Key indicator operating reports are customized for each customer, and the reports are reviewed monthly. Reports provided by Andrews Logistics can include loads per driver per week, labor utilization, shipping and receiving volume metrics, weekly billing detail, equipment utilization summary, and customer delivery data.
The ability to provide high-quality drivers is proving to be a major benefit for Andrews Logistics. “It's a challenge to find good-quality drivers, but we are succeeding,” says Griff Odgers, Andrews Logistics director of safety. “Most importantly, our driver retention rate is around 87%.”
Eschle adds that the driver team has been a key factor in the Andrews Logistics success. “They really drive the company and are the front line personnel taking care of our customers and their customers,” he says. “They also help us in reacting quickly to changing customer requirements. For instance, our drivers in the Dallas area are cross trained to work with a variety of customer accounts.”
Basic hiring qualifications are minimum age of 25 years, three years of over-the-road truck driving experience, and no felony convictions. Drivers applying for one of the liquid bulk operations must have a valid tank endorsement. Those who will handle hazardous materials also need a hazmat endorsement and federal background check.
Newly hired drivers spend as much as six weeks in training that includes a combination of classroom instruction and on-the-job practice. Safety is stressed throughout the orientation process.
During the initial orientation, drivers receive detailed instruction on company policies and the use of personal protective equipment. Instruction covers loading and unloading procedures for the cargoes that will be handled by the driver. Newly hired drivers complete the federally mandated HM-126F training within the first 90 days of employment. All training is verified by the manager of the branch where the driver will be based.
At 90 days, driver performance is reviewed to determine whether additional training is needed. Drivers also receive training updates at quarterly safety meetings.
On-the-job training gives drivers a chance to become very familiar with both tractors and trailers. For instance, newly hired drivers assigned to the Tri-Gas operation spend six weeks or more training on the job with experienced Andrews Logistics drivers.
“The cryogenic trailers are complex units outfitted with very expensive hardware,” says John Eschle, operations manager for both the Tri-Gas and Petra Chemical accounts. “Drivers need to gain a good understanding of how to properly operate equipment such as the cryogenic pump, which must be cooled down before a delivery. Drivers also need to know how to safely maneuver a tractor-trailer in a tight delivery location, something that happens frequently in the Tri-Gas operation.”
Premium power
Drivers are provided with late model tractors, all of which are Paccar products. “For instance, we use Kenworth tractors in the Tri-Gas operation,” Eschle says. “We also have Peterbilt tractors. Our drivers are happy with both brands, and we obtain very competitive pricing.”
The company purchases Peterbilt Model 386 and Kenworth T800 conventionals. The newest tractors were specified with deluxe cab interiors, Caterpillar C13 and C15 engines, and Eaton Fuller 10-speed transmissions. The fleet runs sleeper and daycab units based on customer needs.
Tractor-mounted product handling equipment for most of the Andrews Logistics tank operations includes STAC ThermaFlow hydraulic power and Ranger gear-driven pumps. Running gear includes an air suspension, aluminum disc wheels, and 11R22.5 low-profile radial tires.
Andrews Logistics runs a diverse collection of tank trailers, with the largest group being used to transport lubricants and lubricant additives. The carrier uses aluminum MC306 and DOT406 tanks, as well as stainless steel chemical trailers.
Supplied by Heil Trailer International, LBT Inc, and Polar Trailer Inc, the typical aluminum tank in lubricant service ranges from 9500 to 9700 gallons and has four compartments. Tank hardware includes Civacon and EBW internal valves and API adapters and Scully overfill protection.
Most of the unloading outlets have sight glasses. “The sight glasses give drivers an indication of previous cargoes, such as transmission fluid,” says Ben Pantus, Los Angeles operations manager for Andrews Logistics. “Sight glasses help us avoid heels, a key priority.”
Stainless steel tankers are used to transport lubricant additives and the base oils that form the foundation of lubricant products, according to Dave Ford, Pittsburgh operations manager for Andrews Logistics. Supplied by Acro Trailer Co and Bulk Manufacturing, the DOT407 trailers have capacities ranging from 6800 to 7500 gallons. Stainless steel trailers are preferred because they are easier to clean between loads.
Andrews Logistics purchased all six of its propane trailers from Mississippi Tank Co. Having a typical capacity of 11,600 gallons, the MC331 pressure vessels are outfitted with Blackmer pumps and Fisher valves. All of the propane trailers are fitted with passive shutdown hardware from Smart Hose Technologies.
The most sophisticated trailers in the Andrews Logistics fleet are the nine cryogenic tankers that serve the Tri-Gas account. With capacities ranging from 5800 to 6000 gallons, the heavily insulated trailers have stainless steel cryogenic pumps powered by Kubota diesel engines.
With demand growing for the niche services provided by Andrews Logistics, the drivers and their rigs should have plenty of work in the months and years ahead. Eschle and his partners clearly have built a winner.