OTL/UPT Builds a Strong Future With Focused Westward Expansion
Oct 1, 1998 12:00 PM, Charles E Wilson
Selective expansion, use of cutting-edge computer technologies, and old-fashioned one-on-one customer service have made United Petroleum Transports a formidable competitor. The Oklahoma City-based tank truck carrier has carved out a solid niche in Oklahoma and the surrounding states.
The 32-year-old company strengthened its role in Texas in 1997 by purchasing Oil Transport Company and the refined tank truck assets of Pride Refining Corporation. A westward expansion is well underway, and the fleet has grown to 375 tractors and 450 trailers.
"We have grown by taking advantage of opportunities as they have come along," says Greg Price, president of United Petroleum Transports. "We have pursued growth in markets where we see good potential that fits our operation. However, our objective is not to just get big. We don't feel we have to be any certain size, because there are plenty of niches to fill.
"We have a number of assets that are contributing to growth, and our management team is one of the most important. We have a great team that works very hard. We have added numerous excellent people through the recent acquisitions. They have added a lot of value and have made us a much better company.
"Another asset has been our ability to develop innovative services for our customers. For instance, ours was one of the first tank truck carriers to provide an inventory control system for service stations. We were doing that almost from the time the company was established, and our inventory control system remains an important part of our operation."
Keith Price, Greg's father, put the carrier's inventory control system together. He and three partners started Oklahoma Tank Lines (OTL) in 1966. The carrier operates today as a subsidiary of United Petroleum Transport.
Price started his trucking career with Western Commercial Transport of Fort Worth, Texas. He had risen to vice-president of sales when several acquaintances asked him to join them in starting a new tank truck carrier to serve the Oklahoma petroleum market.
>From the outset, the new tank truck carrier was under contract to handle refined product distribution for all of the Kerr McGee service stations in Oklahoma. A key selling point was the carrier's willingness to manage the service stations' inventory, which boosted distribution efficiency and economy.
By 1969, Price had bought out his partners. The carrier was growing slowly but steadily in the Oklahoma market. The biggest boost in growth came in 1980, when Price bought United Petroleum Transport (UPT) from Sun Oil Company.
Acquired by Sun in the mid-1970s, UPT hauled refined petroleum and some chemicals. The petroleum company had tried to build for-hire business through UPT but never achieved more than limited success.
However, Price and his son, Greg, saw future potential in the tank truck carrier. "Deregulation had arrived, and we received our first interstate permits through UPT," Greg says. "We also began applying for intrastate authority in other states, and our first success came in Kansas."
UPT gained a toehold in Texas in 1986 when it bought Cactus Transport of Borger. By then, Keith had sold UPT to Greg as part of a strategy to keep the interstate carrier separate from OTL. Each company had its own well-established niche and customer base.
Greg owned both companies by 1991, and state regulation was an endangered species. They were merged, and OTL became a division of UPT. "We still run both of them," he says. "OTL has a lot of name recognition in Oklahoma, and UPT has a good name for the future."
Refined petroleum products remain the primary focus, but the company also transports asphalt, lube oils, and a variety of petrochemicals, including solvents. "We started out as a petroleum hauler, and this is what we do best," Greg says. "The other cargoes are complementary."
Despite the narrow product focus, the customer base is broad. In addition to large oil companies and convenience store operators, the carrier works with many medium to small petroleum marketers. "We've had a lot of success working with jobbers," Greg says. "We show them that we can meet their needs and save them money on transportation. They are able to shift those financial resources to other projects."
UPT and its OTL subsidiary have achieved success over the years by providing customized service. Numerous trailers are in dedicated service and carry customer livery. "We're seeing a lot of interest in this," Greg says. "What we want are enough loads to keep a trailer running at least 20 hours a day."
He adds that the increased demand for dedicated trailers is a reflection of an ongoing move by oil companies of all sizes to curtail their fleet operations. "They realize we do everything their fleets do and more," he says.
Today, UPT and OTL have operations in Oklahoma, Kansas, Texas, Arkansas, Missouri, New Mexico, and Colorado. "We're moving westward, and we're being very selective in where we operate," Greg says. "We're forming strategic alliances to serve customers in areas where it's not feasible to run our own trucks."
The westward shift has been helped by the laying of pipelines from the oil refineries on the Gulf Coast. The arrival of the pipelines and the establishment of new bulk terminals have altered the distribution patterns. OTL/UPT has willingly embraced the changes.
In addition to 18 customer service centers (CSCs), OTL/UPT vehicles are based at more than 40 locations. Management stresses that the customer service centers are an important part of the operation. "We believe it's important to have satellite customer service centers with managers in place," Greg says. "Personal contact and involvement have always been important in our operation. Customers want to work with somebody local, not a dispatch office hundreds of miles away."
The customer service centers are linked by a sophisticated computer network, and the system is being upgraded. Some of the newest computer technologies have been incorporated. The carrier uses innovative technology to track shipments, dispatch vehicles, and manage the inventory control program.
"We're using TMW software," Greg says. "Year-2000 modifications have been made by the vendor, and we will implement those changes this fall. We believe this puts us ahead of the curve."
In an effort to boost operational efficiency in the field, laptop computers are provided to sales, safety, and regional operations managers. All of the laptops have modems, enabling managers to connect to the company network.
At the Oklahoma City headquarters, invoices and other delivery documents are electronically scanned into UPT's computer imaging system. Clerks are just beginning to scan internal documents, such as accounts payable reports. Paper documents are disposed of after about three months.
Customers are able to place orders over the Internet. The tank truck carrier has a web site (www.otl-upt.com) that contains a substantial quantity of information for shippers and other customers and its employees. Among other things, the carrier's DOT (Department of Transportation) safety report is accessible from the site.
Despite the growing reliance on the Internet and other computer technologies, UPT has maintained its people focus. The company's customer service centers are open around the clock and are staffed with experienced dispatchers.
Customers aren't the only reason for the personal contact. It also helps retain drivers, and retention has become a key concern for the tank truck carrier. UPT and OTL currently have about 450 drivers on their rolls.
"Our two most significant assets are our customers and our staff of trained, professional drivers," Greg says. "The drivers are our representatives, meeting with our customers day in and day out. It is up to all of us to see that they have a safe and successful trip and delivery."
"It's a constant challenge to improve driver conditions. We want driving to be a good career, and we have developed a career-path program for our drivers. It includes management training and offers advancement opportunities."
Drivers have an opportunity to choose from local, regional, and longhaul runs, and they can shift among those runs. Company drivers can progress through a series of ranks that include certified, master, senior, and senior master ratings.
It takes about 52 months for a truck driver to progress through the ranks, according to Greg. Promotions come every three months, on average. Advancement is based on performance and a willingness by the driver to raise his level of professionalism.
Despite driver shortages throughout much of the company's operating area, OTL/UPT remains selective in its recruitment efforts. The minimum age for a driver is 23, and the company prefers applicants who are at least 25 years old.
The carrier has begun hiring more drivers directly out of select truck driving schools. These drivers are put through an extended training program that lasts at least 30 days. The extended training is conducted by OTL/UPT trainers.
The tank truck carrier looks carefully at motor vehicle records, rejecting anyone with a conviction for driving under the influence. Those with more than three traffic citations in a three-year period also are turned down.
While most of the driver requirements are strict, the carrier shows considerable flexibility about owner-operator tractors. The main requirements are an up-to-date FHWA (Federal Highway Administration) annual inspection and a product pump. OTL/UPT sets no age, weight, or horsepower limits. Owner-operator tractors can be sleeper or day-cab units.
Owner-operators and company drivers go through the same initial training, and they participate in the company's award-winning safety program. Regular safety meetings at the terminals are supplemented with impromptu sessions that are scheduled as needed.
The initial orientation includes on-the-job training and familiarization with the equipment in the OTL/UPT fleet. Training aids include a simulator that is used to demonstrate how tank components function. Drivers also work with the simulator to learn proper brake adjustment procedures.
Company drivers have a chance to familiarize themselves with the tractors in the fleet. They learn that the local and regional petroleum transports are slipseated for maximum utilization. Drivers work 10-hour days with six days on, two days off.
Pay is calculated by the load. Day-shift drivers will handle five to six loads, while those working the night shift can haul as many as eight loads. "They just have a lot less traffic and other delaying factors," says Joel Evans, customer service center manager at the Tulsa, Oklahoma, center.
Longhaul drivers are paid by the trip and generally are out three days at a time. Most runs are out and back with limited backhaul opportunities. Still, efforts are being made to boost revenue per mile with more backhauls.
The longhaul loads have a strong appeal for owner-operators, and they handle most of the traffic. On the company-driver side, teams are used for expedited service. The company has had its best success with husband-wife teams.
A considerable amount of the longhaul business originates in Tulsa, and the terminal there is the second-largest in the OTL/UPT system. Over 50 tractors are based at the facility, most of them supplied by owner-operators.
For the most part, the company tractors assigned to the Tulsa terminal are the same as for the rest of the operation. However, five recent additions are Freightliner Century Class tractors with 60-inch walk-in sleepers that are assigned to the longhaul teams.
The standard petroleum transport tractor has been a Freightliner conventional with daycab, but a few Mack CH 613s were added this year. The Freightliners have 430-hp Caterpillar C12 engines. The Macks are powered by 427-hp Mack Maxidyne engines.
The Freightliners are specified with Meritor 10-speed transmissions and single-drive axles with a tag axle. The final drive ratio is 3.52. The Macks have 10-speed Fuller transmissions and Hendrickson drive tandems. OTL/UPT has begun specifying air-ride suspensions on all new tractors.
Every effort has been made to limit tractor weight. The carrier specifies a single 84-gallon aluminum fuel tank, Alcoa aluminum wheels, and Con Met aluminum hubs. Centrifuse brake drums are standard.
New Freightliners on order will have a 4912-inch fifthwheel height and 1912-inch tires. They will be matched with new DOT406 tank trailers that are also on 1912-inch tires. "Lower weight is a big reason we're doing this," says Gene Ingram, vice-president of fleet services at OTL/UPT. "However, it also helps make the rigs more stable."
Petroleum trailers are supplied by Heil Trailer International, Polar Tank Trailer Inc, and Fruehauf/LBT. The new low-center-of-gravity trailers hold 9,800 gallons and weigh 9,500 pounds. They have four compartments, with one double bulkhead.
Trailers generally are ordered without hardware. Final installation and prep are done at the OTL/UPT make-ready shop in Oklahoma City. Hardware includes Civacon bottom-loading adapters, Civacon ROM overfill protection, high-flow Knappco internal emergency valves, and Betts 20-inch domelids.
Full-length aluminum hose troughs are standard on new trailers. They are preferred because they provide more room for hoses. Several vendors supply the three- and four-inch petroleum hoses used by the carriers. PT Coupling provides the hose fittings.
Petroleum transport trailers in the OTL/UPT fleet are designed for a 20-year life, while company tractor trade cycles average 42 months. Tractors typically travel 100 to 200 miles a day in petroleum service.
Getting the most out of the fleet is the responsibility of the maintenance department. Maintenance shops are in place at 11 terminals: Oklahoma City and Tulsa; Wichita and Chetopa, Kansas; and Abilene, Odessa, Wichita Falls, San Antonio, Houston, Amarillo, and Dallas, Texas.
Preventive maintenance schedules call for engine oil and filter changes at 15,000-mile intervals. Walk-around inspections for tractors and trailers are performed every 60 days. During those inspections, brakes are adjusted and chassis points are lubed.
Most of the shops are certified to perform the federally required tank tests and inspections. However, they don't do code tank repairs. Most major tractor repairs are contracted out.
The maintenance operation helps OTL/UPT achieve the high level of performance that has made the tank truck carrier successful over the past 32 years. The quality reputation established by Keith Price continues today.
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