Service Transport scrambles to keep pace with shipper demand
Apr 1, 2011 12:00 PM, By Charles E Wilson
Shipment volumes are soaring for Service Transport, a wholly owned subsidiary of Adams Resources & Energy Inc under the direction of Chairman K S “Bud” Adams. To keep up with demand, the medium-sized tank truck carrier is adding tractors and trailers as fast as it can get them. The driver force also is being increased as quickly as practical.
“We can already see that this year should be close to a record year for us,” says Claude H Lewis, Service Transport president. “We had the best February ever, and the business mix was just right. We're going gangbusters, and as far as we are concerned the tank truck industry is out of the recession.
“We're not quite back to where our operation used to be, but we are getting close. Barring a major economic catastrophe in the United States, we believe Service Transport will continue to see solid growth and improvement at least into 2013.”
One reason Service Transport came through what is now being called the Great Recession is that the carrier started preparing for an economic correction in mid-2008. “We started downsizing because we saw business trends and forecasts that suggested a downturn,” Lewis says. “We just had a feeling that it was time to tighten our belts.”
The worst of the recession was in 2009, and it was a mediocre year for Service Transport with gross revenues of $44.8 million. The tractor fleet was downsized by 30%, and the carrier cancelled contracts with some of its lease operators. Still, loads were moving, and the company achieved decent profits that year.
“In fact, we remained profitable throughout the recession,” Lewis says. “We put a lot of work into improving operating efficiencies and lowering operating costs.”
Business was slow at the beginning of 2010, and the Service Transport management team was scrambling to keep the fleet busy. As the year wore on, though, they became confident enough about the economy that they began ordering replacement equipment. By the end of the year, the carrier had achieved gross revenues of $56.8 million.
“We came through this major recession in relatively good shape for a number of reasons,” says Dennis Herrington, Service Transport vice-president of quality assurance. “We have a great core group of customers, and they know we don't cut corners. We have a team of dedicated, hardworking employees who do their best to provide our customers with top-quality service. We run great equipment, and we use some of the best trucking technology on the market.”
Service Transport serves a diverse customer base, hauling a variety of products, especially water-white chemicals. The product range include ag chemicals such as herbicides and pesticides, as well as automotive and construction chemicals. “Most of the products we haul go into manufacturing applications,” Herrington says.
Among the factors helping Service Transport build strong chemical customer relationships is its participation in the American Chemistry Council's Responsible Care Management System. “This is a great program that covers safety, quality, and environment,” says Kevin “Skip” Parker, Service Transport safety director and Responsible Care coordinator. “RCMS covers more and is less expensive than ISO 9001 certification, which must be repeated every three years. We believe our process tracking systems and documentation have gotten better, and we've developed detailed flow charts of our operations.”
Most shipments originate along the Gulf Coast, but the carrier hauls them to customers across North America. Service Transport is a longhaul over-the-road tank truck carrier but not in the typical sense. Most operations are out and back, and the average trip takes less than three days.
Canada, especially the provinces with automotive manufacturing operations, is a key destination. “Over the past year, we experienced a significant increase in deliveries to Canada,” Parker says. “Our Canada activity increased significantly after we implemented processes to expedite border clearance. Our tank trailers enter Canada loaded and return empty.”
Inconsistent enforcement of the US Customs and Border Protection's empty container rule remains a concern, but Service Transport acted proactively by developing an empty-container bill of lading that is accepted at the CBP checkpoints that are requesting such documentation.
Service Transport works with a Canadian freight broker to ensure that all documentation is in order. The carrier participates in the automated customs environment (ACE) documentation program, and the broker uses the eCustoms system.
Service Transport also sends a significant number of loads into Mexico, but all of the border clearance activity is managed by the carrier's interline partner in Mexico. As with Canada, the Mexico business has been strong and steady, according to Parker.
The growing shipment volume is handled by a fleet that includes 339 tractors and 441 trailers. The fleet is dispersed among five terminals in Houston, Corpus Christi, and Nederland, Texas; St Gabriel, Louisiana; and Saraland, Alabama.
Tying the whole operation together is TMW Suite. “We use the full TMW Suite system, including the TMT maintenance package,” says Jim Brown, Service Transport vice-president of operations/business development. “We use the TMW's dispatch components and PeopleNet's on-board communications and tracking capabilities to manage fleet operations across North America.”
All of the tractors in the fleet — including those belonging to lease operators — have been outfitted with the PeopleNet system. “We chose PeopleNet because the company manufactures a great product and provides great customer service. We believe their system, which combines cellular communications and satellite tracking, is superior to anything else on the market. The system gives us better control over out-of-route miles, especially as related to hazmat shipments.”
Service Transport has developed such a strong commitment to PeopleNet that it was selected as a test fleet for the computer technology company's new solid-state unit with the much brighter BLU display. Ten Service Transport tractors ran the new system for about a year. “We were impressed enough that we are outfitting all of our tractors with the new BLU technology,” Parker says.
In addition to communication and vehicle tracking capabilities, the on-board computers are used for electronic driver logs. “Electronic driver logs have been great for our company and our drivers,” Parker says. “Often our trucks are waved right through the roadside inspection stations. Our drivers typically gain 30 to 45 minutes a day with the e-logs, and that adds up over a week. In addition, the PeopleNet system automatically switches to Canadian log rules when a tractor-trailer rig enters Canada.”
Computer technology isn't all that Service Transport has been buying to upgrade fleet operations. The carrier has moved aggressive to replace aging vehicles and expand the size of the fleet. Fifty new tractors were purchased last year, and 50 more were added in the second quarter this year. The carrier plans to close out the year with another 50-tractor purchase in the fourth quarter.
In the most recent purchases were split evenly between Mack Pinnacles and Peterbilt Model 386s, all with mid-roof sleepers. “We looked for trucks with the best engines for the future,” Brown says. “These purchases marked a big change because we used to run 100% International tractors.”
The Macks come with Mack's own MP8 13-liter engine rated at 445 horsepower, and the Petes were specified with the 15-liter Cummins ISX rated at 450 horsepower. Service Transport went with automated transmissions in the new tractors. The Macks have the manufacturer's new mDrive, and the Petes were ordered with Eaton's UltraShift Plus.
“We're getting very positive feedback on the mDrive from our drivers, and the UltraShift Plus transmissions also are performing well,” Brown says. “We decided on automatic transmissions for safety and driver ease of use. Automatic transmissions are easier to operate, and all ages of drivers like them. We're trying to recruit more women as truck drivers, and we hope the automatic transmissions will help the effort.”
The latest tractor specifications include Bendix disc brakes in all wheel positions and stability control, sliding fifthwheels, and dual 100-gallon fuel tanks. “We plan to test adaptive cruise control on our next truck order,” Brown says. “We like the concept.”
While the latest changes in engine emission control technology have added more than a thousand pounds to tractor tare weight, Mack and Peterbilt have kept the frame rails relatively uncluttered. That is important because Service Transport installs PTO-driven Roper product pumps and Quincy compressors on its tractors.
Tank fleet expansion
The carrier also has been building up its tank trailer fleet. That includes ordering 30 new stainless steel DOT407 chemical tankers from Brenner Tank LLC, Bulk Manufacturing, and Polar Tank Trailer. An additional 20 DOT407 stainless steel tankers are being leased from Matlack Leasing LLC.
“We had to lease some trailers because we simply can't get new stainless steel tank trailers fast enough,” Brown says. “We picked Matlack because they are in the midst of a fleet modernization program and had new tank trailers available.”
The new trailers on order include a mix of straight round units and double-conical tankers. Capacity for the new tankers has been dropped to 6,800 gallons because tractor tare weights are now in the 19,000-lb range largely due to the engine emission control systems.
Because growing numbers of shippers and receivers no longer allow drivers on top of trailers, Service Transport specified the new equipment with Girard ground-level vent actuation systems. Tank hardware includes Betts domelids and discharge outlets. Running gear includes Hendrickson Intraax air suspension systems.
Getting enough equipment to meet customer demand is one thing. Keeping the tractor-trailer rigs rolling is quite a different concern as the economy improves.
“We have increased our driver force by 10% in recent months, but that is not enough to keep up with customer demand,” says Wayne Brewer, Service Transport environmental health and safety director. “We have some trucks sitting right now, and I don't know if we'll be able to reach 100% utilization under the current market conditions. It's quite possible that we will have a shortage of outstanding driver candidates for the foreseeable future.”
Other managers at Service Transport express the same concerns about the growing shortage of top quality truck drivers. A key contributor to the shortage is the way truck driving has become defined as a low-skill job with low pay and little opportunity for career advancement.
“We hold job fairs at some of our terminals, and we recruit from some of the better truck driving schools,” Brown says. “We simply can't find enough of the top-quality candidates. Nobody is encouraging people to join this industry, and the driver shortage is going to get worse until the industry and public perceive truck driving as an honorable profession again.
“This is a skilled profession, and our drivers are proof of that. They are computer literate, knowledgeable about chemicals, and have the ability to drive safely under some of the most challenging traffic conditions.”
Drivers need a good understanding of the regulations, such as CSA 2010. Brewer says Service Transport began working with its drivers on CSA well before the regulation took effect in December 2010.
“We covered CSA in special training sessions and during a regular safety meetings,” he says. “Our drivers caught on quickly. They recognized the critical importance of this new regulation. We use the new PSP program for driver hiring, but that is just one of our tools.
“We've always paid attention to our DOT (Department of Transportation) safety profile, and we shared that data with our drivers. That made it relatively easy for all of us at this company to make the transition to the new system.”
The carrier checks the Federal Motor Carrier Safety Administration site weekly and is using J J Keller's CSA data collection system to analyze the information. So far, Service Transport has been scoring in the top 10% of fleets.
Clearly, Service Transport's management team believes it has built a winning strategy that can overcome even the worst economic conditions. The proof can be seen throughout the operation.
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