STRATEGIC partnerships and niche marketing enable operators of smaller storage terminal to remain competitive in today's market. Wolf Lake Terminals Inc, Hammond, Indiana, has been successfully following this approach since 1974.
The family company owns and operates a 72.5-acre storage terminal and industrial center in Hammond and is putting the final touches on Tanco Clark Maritime LLC, a new facility at the Clark Maritime Center state-owned port in Jeffersonville, Indiana. The Long Middendorf Families also own Tanco Terminals Inc at the International Port of Indiana in Portage. Combined liquid storage capacity for the three locations is 956,000 barrels (40.1 million gallons).
“As a smaller operator, we have succeeded by focusing on value-added services for our customers,” says Garland Middendorf, president of Wolf Lake Terminals. “We fill niche markets by providing special services, such as rail-to-truck transfer, packaging, unit operations, and blending.
“Smaller for-hire terminals like ours should continue to play an important role in this industry. Big isn't everything. Terminals in the 200,000- to 300,000-barrel range give customers a chance to move into new markets without building up huge inventory levels.
“I believe our company will continue to grow, and we are looking at opportunities across North America. We are exploring potential partnerships with other types of operations, such as fertilizer manufacturers and grain terminals. They already have infrastructure, such as dock facilities and rail access, in place. We can piggyback on that.”
Middendorf isn't focused just on the outlook for his own company. As the current chairman of the Independent Liquid Terminals Association (ILTA), he's also concerned about the future of the industry as a whole.
“With the consolidation and other changes occurring in this industry, it's important for storage terminal operators to remain united,” he says. “We have to do everything we can to ensure that terminal operators continue to view ILTA membership as an essential part of their business. We need greater involvement from related industries, such as airport operators and tank truck carriers.”
Middendorf was a strong believer in ILTA involvement throughout most of his 28 years of involvement in the for-hire terminaling business. The company and the association came into being the same year (1974), and Middendorf wasted little time in joining the group. He has been an active member ever since.
Wolf Lake Terminals was established after Middendorf and partner Woody Long purchased a US government logistics facility in Hammond. They learned about the availability of the facility from an advertisement in the Wall Street Journal. Built in the late-1950s, the warehouse and tank farm complex had been used to store vegetable oils, tires, and other supplies needed by the US government.
Secure Facility
One of the challenges facing the partners at the outset was lack of water transport access to the facility. “We faced significant shipper resistance at first, but the 1974 oil embargo gave us a big boost,” he says. “We started as a secondary storage location for many customers, but we now have a solid customer list. We've done that by successfully marketing the special features of the Wolf Lake Terminal operation.”
For instance, much of the facility was hardened to protect against various threats, such as earthquakes, terrorism, and enemy attack. Warehouse walls are constructed of concreted steel, and the floors consist of six inches of double reinforced concrete. The foundations for the original storage tanks are anchored 15 feet into the ground.
“The federal government pumped a lot of money into making this a very secure facility,” says Kip Middendorf, Garland's son and Wolf Lake Terminals sales and marketing manager. “This helps us in providing a very high level of security to our customers.”
He points out that the company has enhanced the built-in security in several ways. Closed circuit television monitors activity 24 hours a day. Gates are locked at night, and storage tanks are locked down. Warehouse doors have electronic security, and the alarms are linked to the police department. Sprinkler alarms are connected to the fire department.
Since the terrorist attacks on September 11, 2001, security patrol hours at the facility were extended. Additional new fencing, lighting, and security cameras were installed. The company also benefits from the presence of armed security guards at the adjacent federal government warehouse complex.
“We believe that the security measures have brought peace of mind for our customers,” Kip Middendorf says. “We'll continue to enhance security as part of our overall effort to provide customers with the highest levels of service.”
Storage Options
The Wolf Lake operation provides customers with a broad range of options. Warehousing is available through the Wolf Lake Industrial and Post Warehouse units. Bulk liquid storage is handled through Wolf Lake Terminals.
Wolf Lake Industrial operates three 200,000-sq-ft buildings that are subdivided into units of 20,000 square feet or larger. Occupying 32 acres, these units have 18-ft-high ceilings, interior truck docks, and rail sidings. They are used for warehousing, distribution, and manufacturing.
Post Warehouse, also family-owned, is a public warehouse operation that has 200,000 square feet of space. Post Warehouse provides customs-bonded storage, packaging, blending, and palletizing services. It operates a Kosher-certified white room, where drums and intermediate bulk containers are filled.
“Post Warehouse handles all the packaging for Wolf Lake Terminals,” Kip Middendorf says. “This is a part of the business that we expect to continue growing.”
Tank Farm
The liquid storage terminal covers approximately 30.5 acres and has tankage of 21.2 million gallons (505,500 barrels). Total number of tanks is 112, and they range in size from 7,000 gallons to 420,000 gallons.
Commodities handled include #2 and #6 fuel oil, solvents, plasticizers, naphthenic and paraffinic base oils, caustic soda, sulfonates, glycols, white oils, and sulfuric acid. Among foodgrade products are corn syrup, liquid sugar, and a variety of vegetable oils — soybean, coconut, and palm.
Tanco Terminals Inc has two terminal locations. One is on Lake Michigan at the Indiana Port Authority, 16 miles east of Hammond in Portage. The terminal has six storage tanks with a total capacity of 10.5 million gallons (251,000 barrels). Tanks range in size from 840,000 gallons to 2.7 million gallons and are used for petroleum products, chemicals, animal fats, fertilizer solutions, caustic soda, and asphalt products.
The other, and newest, terminal is in Jeffersonville in southern Indiana on the Ohio River. The Tanco Clark Maritime terminal has four tanks for asphalt service. Dry bulk products also are stored at this terminal. Total capacity of the two terminals is 451,000 barrels or 18.9 million gallons.
The biggest difference between the two Tanco facilities and the Wolf Lake tank farm is water access. Tanco Terminals overlooks Lake Michigan from Burns Waterway Harbor at the Port of Indiana. Tanco Clark Maritime sits on the bank of the Ohio River across from Louisville, Kentucky. All three terminals have good access to highway and rail connections.
Terminal Access
At Wolf Lake Terminals, 8,500 feet of track is in place (providing 150 car spots), and the company has its own switching engines. Tankcars are delivered by the Indiana Harbor Belt Railroad and are repositioned by Wolf Lake personnel.
“We turn railcars very quickly,” Kip Middendorf says. “We can have a car out of here in as little as three days. We know how important it is to keep the cars from sitting.”
About a third of the inbound rail shipments are transferred directly into tank trucks. The remainder is offloaded into storage tanks or is processed by the Post Warehouse packaging operation.
The overwhelming majority of tankcars are offloaded with nitrogen gas, which is preferred because it is clean and efficient. Tankcars take one to three hours to unload in most cases.
Terminal personnel follow detailed procedures for nitrogen, according to Dennis Mitchell, terminal supervisor at Wolf Lake Terminals. Bills of lading are stamped with a red warning that reads: This Tank Contains Nitrogen Blanket Do Not Enter. Railcars and tank trailers are tagged top and bottom with a laminated warning label. Truck drivers are informed of the presence of nitrogen and must sign off on a nitrogen certificate.
Tank Truck Activity
Tank trucks transport less than 10% of the inbound shipments, but they dominate the outbound activity. The terminal loads more than 10,000 tank trailers annually. Product volume handled monthly at the terminal is in the 200,000-plus range.
Truck shipments are scheduled by appointment, and Wolf Lake Terminals asks for three days notice. Arriving tractor-trailer rigs are weighed. They are weighed again after loading.
Wolf Lake Terminals workers handle all loading duties, and they waste little time in the process. Product from the storage tanks is transferred at the main loading rack or at the blending operation. Cargoes also are transloaded from railcar to tank trailer. All products are bottom-loaded.
A specialized blending operation was added recently for deicing materials used on airplanes during the winter. The operation is staffed by the customer, which serves the Greater Chicago Airport Authority.
Steel Tanks
Beyond the loading rack and primary blending operation are the storage tanks. The facility includes carbon and stainless steel tanks. Some are insulated and some are lined. Internal and external heat are available, along with product agitation.
Smaller tanks (those in the 15,000-gallon to 36,000-gallon ranges) have become increasingly popular with customers. “This is a distribution facility,” Kip Middendorf says. “Customers want smaller tanks that make it easier to turn inventory quickly.”
Spill containment around the tanks consists of dikes made of iron slag. For containment purposes, storage tanks are grouped in sixes. “The iron slag comes from local steel mills, and there is a lot of it available,” Kip Middendorf says. “It makes excellent diking material. You need a jack hammer to dig it up.”
Jerry Patten, terminal manager, and Mitchell, oversee 30 workers at the terminal. Duties include regular updates on product levels in the storage tanks. Physical checks of tank levels are backed up with computerized monitoring.
Wolf Lake Terminals developed its own terminal automation software for tank monitoring and terminal management in general. Available for sale to other storage terminal operations, the software was designed for simplicity of operation.
When customer orders are entered, the system keeps a running total of inventory levels. This data is reconciled with mechanical gauging of the tanks and with customer records. “As a result, we're returning 99.9% of the product stored here, which we believe exceeds the industry average,” Kip Middendorf says.
Employee Hiring
Good employee selection and training have been key factors in the company's ability to maintain tight inventory control. The company looks for applicants with appropriate skill levels and a high school diploma or equivalent.
New-employee orientation starts with instruction on environmental, health, and safety. New hires receive the right-to-know training required by the Occupational Safety and Health Administration. They receive a basic understanding of the chemicals handled at the terminal.
Safety policies are discussed, and personal protective equipment is provided. Workers receive hardhats, safety glasses with side shields, and safety shoes. Workers are required to wear uniforms, and the company pays three-fourths of the cost.
Supervisors provide function-specific training. Initial on-the-job training (OJT) lasts about three months, and workers receive additional OJT anytime they move from one function to another. “We make them pass a test before allowing them to work a job function on their own,” Mitchell says.
Throughout the training, managers stress the quality procedures in place at the terminal. Wolf Lake Terminals attained ISO 9002 certification about three years ago and is now exploring the requirements for ISO 14000 environmental certification.
The company has just made the transition from ISO 9002 to ISO 9001/2000, which is designed to make the quality system more process oriented. “We believe the revised standard is a better fit for a smaller company like ours,” Kip Middendorf says.
Updating the quality program has given management an opportunity to upgrade factors, such as internal audit capabilities. In the process, Wolf Lake Terminals managers are ensuring that customers continue to receive the highest levels of service.