Mallet Uses Private Tanker Fleet For Competitive Edge in Edible Oils
Aug 1, 1998 12:00 PM
Transportation serves as a means of differentiating Mallet and Company Inc from its competitors in the custom-blended edible oils business. The Carnegie, Pennsylvania-based company skillfully combines its own private fleet with for-hire carriers to tailor distribution service to the needs of each customer.
The strategy is part of a winning formula that has made Mallet a market leader in a very competitive industry. The company ships about five million pounds of vegetable oil products a month to customers in North, South, and Central America; the Middle East; and Asia.
"We use our transportation department as a marketing tool," says Robert I Mallet, company president. "Distribution is our competitive advantage, and we stress the benefits of bulk shipments. Transportation is not our primary business, but it gives us something to promote.
"We provide a premium service that offers considerable flexibility. For instance, we can completely manage a customer's edible oils inventory. We have initiated an IBC (intermediate bulk container) program that is competitive with drums."
Innovative Products Established in 1939, the company has always been dedicated to providing innovative products and services for customers in the food industry. Mallet's research and development laboratory blended the first icing stabilizer for the baking industry in 1939. Other firsts include the mechanical bread pan oiler, target area cake pan greaser, and electrostatic release oils.
Mallet has become a leading supplier of high-quality foodgrade release compounds, edible oils and specialty blends, shortening, emulsifiers and icing stabilizers, and machinery for the baking and food processing industries. All together, the company produces in excess of a hundred edible oil products, a majority of them soybean oil based.
All of the oil-based products are blended at Mallet's 160,000-sq-ft plant in Carnegie. The kosher-approved blends are formulated in batches and are held in storage tanks in the plant before being shipped to customers.
For-hire tank truck carriers handle most of the inbound shipments of raw materials, including soy, coconut, peanut, and canola oils. "Railroads used to transport the majority of our inbound shipments," says Caryle A Aguglia, Mallet traffic manager. "We became dissatisfied with the service and decreased rail usage. We've achieved a lot more flexibility with tank trailers, and the cargo receives better care when moved by truck."
Inbound raw materials must meet Mallet's standards for quality and are carefully checked at the receiving dock. Stringent material controls and multiple quality checks throughout the production process ensure that customers receive products that are of consistently high quality.
Transportation Options On the outbound side, customers are offered a wide range of transportation options. Domestic shipments predominate, but the international customer base is growing. The traffic department arranges containerized shipments to overseas destinations.
Common carriers are used in the United States for truckload and less-than-truckload (LTL) shipments of packaged products. Customers can place an order any time of the day, and Mallet personnel will shop for the best rate.
Mallet offers a scheduled delivery program for LTL quantities. Under this option, a cyclical delivery schedule is tailored to each customer. Freight charges are less than half the usual common carrier rate, but the program has a 5,000-lb minimum order requirement.
An increasing number of bulk shipment options are offered. Oil blends, depanning compounds, and lubricants can be shipped in full tank trailer loads or in multicompartment trailers. IBCs are the newest addition to the bulk transportation mix.
The bulk shipment program was initiated in 1974 using custom-built trailers. "Those first units sort of resembled a dry bulk trailer with insulation and in-transit heat," says Mallet, who served as traffic manager. "We tried using for-hire carriers to pull our trailers, but it just didn't work. By 1981, we realized that we needed our own fleet in some instances."
First Tractor The company started out leasing one tractor and a driver, Jim Hervet, who is still with Mallet. "We were very fortunate to find him, because he taught us a lot about the tank truck business," says Aguglia, who became traffic manager in 1981.
Today, Mallet's private fleet includes five tractors and nine tank trailers. The edible oils company also has a handful of van trailers. However, tank truck carriers are still very important to the company, and they include J & M Tank Lines, American Bulk, Herman R Ewell Inc, CAB Enterprises, and Opies Transport.
"We use contract carriers to supplement our small fleet," Aguglia says. "They handle bulk shipments of light oils and related products, while we use our private fleet for products that require special handling or special delivery arrangements."
Mallet's fleet serves customers as far west as Iowa, but most operations are east of the Mississippi River. Trips generally don't exceed five days, and most Mallet drivers are home on weekends.
Routes are compiled weekly based on customer orders. Basic route guidelines are developed using Rand McNally Tripmaker and Streetfinder software. Drivers make as many as three stops a day.
Mallet encourages a lead time of seven to 10 working days for bulk shipments in multicompartment tank trailers, a service that is becoming increasingly popular. Six of the nine tank trailers in the Mallet fleet are multicompartment units that are used in what is essentially an LTL application.
"We have two- and four-compartment tank trailers, and all are equipped with meters and registers," Aguglia says. "In many customer locations, we even supply the storage tanks for our products. We've also had considerable success encouraging the use of IBCs, and we are refilling them at the customer locations."
Tote Program The IBC program was initiated in 1994 and has been a major success. "It has given us a way to provide more economical bulk service to customers who don't have in-plant storage," Aguglia says. "Many of these customers ordered our products in drums or smaller packages in the past. We still have demand for drummed product, but our sales force now actively promotes the bulk option."
Cost is what convinces many Mallet customers to switch to bulk shipments. Salesmen for Mallet explain that each steel drum costs $22, or about five cents a pound for the product inside. Disposal can cost as much as $15 per drum.
IBCs cost significantly more than a drum, but they hold more and are refillable. Also called totes, the IBCs are either leased or sold to customers. Mallet has standardized on the Schutz Ecobulk modular system that consists of a plastic tank inside a heavy-duty wire frame. The 275- and 330-gallon units used by Mallet weigh 130 pounds empty. They can be stacked three high.
In most cases, the totes are refilled at the customer location. Mallet has outfitted one tractor with a portable delivery system that includes a Veeder-Root meter and register, Civacon Kamvalok dry disconnect coupling, Banjo fill nozzle, and 37 feet of 11/2" hose.
The tractor with the portable delivery system is paired with one of the four-compartment trailers in the fleet. The driver makes up to three stops a day and will fill 15 or more IBCs at a time. Deliveries generally take two to two-and-a-half hours.
Tank Inspection While at the customer location, the driver inspects each tote. He will not fill an IBC that has damage to the plastic tank or is in need of cleaning. Maintenance is a shared responsibility, but it is up to the customers to have the IBCs cleaned. After a delivery, the driver seals the fill opening on each IBC.
Drivers delivering to permanently mounted storage tanks follow essentially the same procedures. Storage tanks supplied by Mallet range in size up to about 7,000 gallons. Smaller tanks in the 2,000-gallonrange are most common.
Regardless of tank size or type, Mallet managers are adamant that customers take every ounce of product ordered. "We charge a return rate and a reconsignment fee for any leftover product," Aguglia says.
Once deliveries are made, the trailers must be cleaned out. Mallet relies on commercial wash racks for its cleaning needs, and selects them from a list of approved facilities. Mallet uses several Brite-Sol wash racks in the eastern half of the United States, as well as Sundance in Dearborn, Michigan, and Sani-Wash in Lafayette, Indiana, and Decatur, Illinois.
Tanks are cleaned with hot water at 150 degrees to 190 degrees F. Detergent is not needed. Once clean, the tanks are dried with hot air. Mallet trailers typically arrive at the wash rack with five to 20 gallons of heel, but management encourages drivers to do their best to fully empty the tanks.
Experienced Drivers A great deal of responsibility is placed on the shoulders of the Mallet drivers, and the company is very selective when new drivers are hired. The company prefers truck drivers with considerable experience and a strong record of job stability. Turnover is minimal, and most hiring is prompted by fleet expansion.
With its small fleet, Mallet has found it beneficial to employ drivers through Logistics Personnel, a driver leasing firm. "Compliance issues are among the factors that encourage us to use a driver leasing company," Aguglia says. "We interview and select truck driver applicants. Logistics Personnel handles the actual hiring, payroll, and benefits programs."
Tractors also are leased. Mallet runs vehicles from both Penske Truck Leasing and Rollins Leasing Corp. Leases are on five- and six-year schedules.
The preferred configuration is a Freightliner conventional with 355/400-horsepower Detroit Diesel Series 60 engine, nine-speed Fuller transmission, Eaton drive tandem with air suspension, and an air-slide fifthwheel. PTO-driven Roper pumps are standard.
Tank trailers are purchased used. "The upfront cost is lower," Aguglia says. "We hesitate to spend $70,000 to $80,000 on a new compartmented tank because customer requirements can change too quickly."
Capacities for the stainless steel tank trailers are in the 7,000-gallon range. All of the tanks are insulated and have intransit heat. Double-conical tanks are preferred. "Double-conical tanks unload best when we're hauling cake pan grease and other viscous products," Aguglia says.
Mallet is always looking for more stainless steel multicompartment trailers that can be used in foodgrade service. Demand for the LTL bulk service is growing, and Mallet wants to ensure that it can continue to meet customer demand.
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