With South Carolina on his mind, John Montague realized there was a need in the Charleston market for additional ISO tank container transporters, so he purchased a division of Al Thompson Trucking Company and leased 14 trailer chassis from Thompson's Transcend Leasing and two tractors from Ryder Systems Inc.
“We base our business on superior service and our ability to solve problems for our customers,” says Montague, president and founder of Charleston Transport, which began operation in February 2008. “My background is supply chain execution, and we strive to design programs that meet the unique requirements of our clients.”
The carrier hired three drivers and began hauling specialty chemicals and caustics in ISO tank containers that arrive at the Port of Charleston.
As an added benefit, the company provides storage space for the containers until they are required by their customers. Montague leased yard space from PSC Container Services Group in Charleston before finding a permanent terminal to lease from Liquid Transport Corp.
About 85% of the business requires transportation in North Carolina, South Carolina, Georgia, and Florida, with the remaining 15% including states as far away as Texas.
While the majority of the current customers are involved with imports, Montague plans to expand export-bound transportation. He is considering opening a depot for tank container storage, repair, and testing.
“My initial plans were to double revenue in 18 months, and so far we are on track,” Montague says. “I now have 14 chassis and I'm ready to lease two more tractors and add more drivers. Even in this difficult economy I believe there is a market for trucking companies that can design programs to meet the specific needs of process manufacturers. We don't believe one size fits all. Different customers have different requirements, and we can create a program tailored to their needs.”
Career history
Montague started Charleston Transport after a long career in corporate America. He has worked at large public companies as well as small start-ups. He started at Consolidated Freightways after college in the mid-1980s. Following a large layoff in 1986, he took a hard left turn into technology.
Working with everything from operating systems to large-scale supply chain systems and manufacturing resource planning systems, he learned what made supply chains work. After successful stints at Ashton-Tate, Microsoft, and Platinum Software he started working in turn-arounds. These were companies that were in a difficult financial position for one reason or another and required a new management team to get back on track.
After 15 years of doing turn-arounds for others, he started a consulting business specializing in company turn-arounds. At the same time, Montague was on the lookout for a business that he could acquire and grow. The result of that search became Charleston Transport.
“Starting a company in this economy is expensive,” he says. “You have to bring your checkbook. Every new business is a hog for cash, and this one is no exception.”
That's one reason he decided to lease equipment rather than own. “The jury is still out on that decision, but in the long run, it will prove more cost effective to purchase trailers and tractors,” Montague says. “Starting up, though, I think leasing works better. It's all about cash flow and asset utilization.”
Vehicle program
Freightliner tractors and their maintenance are provided by Ryder. Power units are equipped with Detroit Diesel 455-horsepower engines and Eaton Fuller 10-speed transmissions.
The 43-foot Reinke Manufacturing Company chassis have spread axles and air-operated lift capability for efficient product unloading and minimization of product heel. They are equipped with Hutchens Industries suspensions, ArvinMeritor S-cam brakes with automatic slack adjusters, and Holland landing gear. The tank containers handled by Charleston Transport typically have a 6,500-gallon capacity.
Driver training
Drivers handling the equipment are trained by both company staff and outside consultants. Classroom instruction includes company policies, Department of Transportation regulations, defensive driving, and hazardous materials handling. Driver training sources include those from J J Keller programs and the Pipeline and Hazardous Materials Safety Administration. Drivers are advised that they will be required to provide just-in-time service and contend with traffic congestion and waits at shippers.
In addition to driving instruction, Montague provides sessions on personal finance. “A lot of drivers live week-to-week where spending is concerned,” Montague says. “As they learn the basics of personal finances and budgeting, it helps them and it makes for a better employee for us.”
In recruiting additional drivers, the company looks for those with two-to-five years of tanker experience with no violations on their driving records. Montague is considering owner-operators, as well. Many owner-operators were seeking carrier employment because the cost of diesel was on the rise in 2008.
“I think in the end we will have a blended model with both company drivers and owner-operators,” he says. “In addition to driver recruiting and retention, our big challenge is handling customers who shop on price and don't take into consideration the importance of service.
“Many carriers grew fast with the strong economy we had from 2003 to 2007, but now as the economy slows and many think we are headed for a recession… well that's a very different market. The basics of great service, on-time performance become even more critical. Mediocre carriers will get weeded out.
“We have to focus on customers who appreciate our differentiation and value it. Our differentiation will be on performance and quality customer service.”
Future prospects
Looking to the future, Montague notes that the Port of Charleston has undergone several infrastructure improvements and others are on the drawing table. A harbor deepening and widening project was completed in 2004 that takes the inner harbor channel to 45-feet deep at mean low water and 47 feet at the entrance channel.
A 1.5-mile road is under construction that will connect Interstate Highway 26 to a 280-acre container terminal under construction on a site formerly occupied by a US Navy base. The port also has acquired 1,800 acres of property for a facility on the South Carolina side of the Savannah River.
All of these improvements bode well for the new transportation company and continue to offer the market incentive that Montague anticipated when he founded the company.
