Cargo tank repairs enhance Southern Tank Leasing appeal
Feb 1, 2004 12:00 PM
WHEN Boyd Duckett and James Suttles started Southern Tank Leasing Inc in 1991, they decided that the operation should include comprehensive cargo tank repair capabilities. It's a decision they've never regretted.
Three Southern Tank Leasing repair shops are in service and more are likely. All together, the three shops have a throughput in excess of 250 tank trailers a month, and outside customers generate approximately half of the total repair business.
“Tank repair work is in my blood, and I believed it was important to include repair capabilities when we established the leasing company,” Duckett says. “We want the repair business to grow. We have plenty of shop capacity, and we can add employees.
“The repair operation gives us greater flexibility on the leasing side because we can make timely modifications to tank trailers to meet customer needs. Repair work also keeps us in touch with our customer base and gives us an idea of what is happening throughout the tank truck industry.
“Besides supporting the leasing operation, tank repair is its own profit center. We're generating more and more repair business from outside our company. We're very competitive on major tank repair projects.”
Duckett says he expects to see a steady increase in tank repair work over the course of the year as the US economy strengthens. “We believe we'll see a slow increase in repair work in each quarter of 2004 as fleet utilization improves,” he says. “We think we will have more wreck repair work starting in spring 2004.”
Duckett adds that the economy has remained slow for many tank fleets. That's one reason why quite a few wrecked tanks are parked at the Southern Tank Leasing shops waiting for customer approval to initiate repairs.
“Carriers have enough operational rolling stock to keep up with shipper demand right now,” he says. “However, they will need those trailers that are awaiting repairs at some point, and we are ready.”
Duckett knows the economic cycles of the tank truck market very well. His father was a Brenner Tank Trailer dealer in the Southeast and owned Southeastern Stainless Steel, a tank repair shop in North Carolina. Growing up in the 1960s and 70s, Duckett traveled with his father on sales trips during the summers.
After a stint as a Brenner dealer in Nashville, Tennessee, and manager of the Brenner lease fleet, Duckett teamed up with Suttles to start Southern Tank Leasing. Suttles convinced him to move to Demopolis, Alabama, where the company is headquartered.
“It's a 50-50 partnership, and we started with 119 tanks that we bought from Central Transport,” Duckett says. “We were able to make about 50 of them roadworthy. We've succeeded because we both put a lot into the operation. We both had extensive industry contacts that have generated a lot of business over the years.”
The first of the Southern Tank Leasing repair shops, a 26,650-sq-ft facility, was opened in early 1995 in Demopolis. It was followed by a 20,000-sq-ft Nashville shop, an existing operation that was purchased by Southern Tank Leasing in 1997. The newest location is in Houston, Texas, and is in a facility that was purchased in June 2003.
The Demopolis shop is staffed with 18 mechanics, including six ASME welders. Nashville employs 15 mechanics, most of them ASME welders. Houston has the smallest staff with seven mechanics, two of which have ASME qualifications.
Tank repair work at the Nashville shop is split between stainless steel and aluminum equipment. “Our Nashville shop works on a lot more petroleum equipment than our other two shops,” Duckett says. “We also work on pressure vessels in Nashville. In addition to wreck repairs, they do a lot of testing and inspections. Nashville also generates the highest percentage of revenue from customers other than Southern Tank Leasing.”
The Houston shop currently handles routine trailer maintenance, such as running gear service, and only for Southern Tank Leasing. “Houston will take outside business when we think it's ready,” Duckett says. “We want repair quality that is on a par with Nashville and Demopolis.”
Stainless steel repairs are the specialty in Demopolis, and 40% to 50% of the work is generated by the Southern Tank Leasing trailer fleet. “We have enough skill at our Demopolis and Nashville shops that we could build stainless steel trailers from scratch,” Duckett says. “When it comes to stainless, I can look somebody in the eye and tell him that nobody can do a better repair job than we can.”
Customers with operations in the southeast provide most of the tank repair business for Southern Tank Leasing. However, the tank repair operation works with about half of the top 10 tank truck carriers, and equipment does come in from other parts of the country.
The shops take on both large and small projects. One of the largest involved the cargo tank assets purchased by Southern Tank Leasing following the Matlack bankruptcy and liquidation. “Our $7 million purchase of the Matlack tank fleet kept the Demopolis shop busy since 2001,” Duckett says.
Many of the 1,200 trailers were old, but very few would qualify as junk, according to Duckett. Most had been well maintained and required little more than cosmetic repairs, such as replacement of jacketing, fenders, and tires. Some were sold, but a large percentage is now an active part of Southern Tank Leasing's 600-trailer fleet.
“We're down to the last 150 or so of the Matlack group,” Duckett says. “These tanks need major repairs. We won't scrap any, though. They all have a use. We may export some of them.”
Matlack trailers that were in relatively good shape went through Southern Tank Leasing's typical in-service overhaul, which includes a rebuild of all valves and vents. “During these in-service overhauls, we repair a lot of wear-related damage,” Duckett says. “We remove surface rust. We do what is needed to ensure a long life for the equipment.”
He adds that Southern Tank Leasing seeks out some of the more challenging repair projects. “We like solving problems,” he says. “We create something when we solve problems. That's what is rewarding about this industry.”
The special projects include modifying piping to fix product-handling problems. The welders at Southern Tank Leasing also have developed fixes for flaws in triangular gusset framing on some cargo tanks.
A significant amount of stainless repair business has come from tanks that have reinforcing rings laid over the heat panels. The tanks were built in the late 1980s and early 1990s, and the rings are developing cracks at the point where they meet the shell. Southern Tank Leasing mechanics fix the problem by modifying the welds.
The Southern Tank Leasing shops are well equipped to handle the repair challenges. In Demopolis for instance, the shop has a five-ton overhead crane for handling cargo tanks and fabricated sections of tanks. Positioned at each of 21 building columns in the shop are outlets for compressed air, water, and 110- and 220-volt electric power.
A well-equipped machine shop includes a press brake, shear, and roll. A bending machine is used to make tank rings. Miller 451 welding machines provide the capacity needed to gouge welds.
The shop capabilities ensure that Southern Tank Leasing will be able to continue meeting the tank repair needs of its customers.
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