Key acquisition puts Andrews Logistics on track to reach $100 million level
IT HAS been a busy few months for the management team at Andrews Logistics Inc. A major acquisition in October 2013 increased the fleet size and expanded the customer roster.
The acquisition of specific assets from Andrews Transport LP in Fort Worth, Texas, added approximately 115 employees (many of them drivers) in Louisiana and Texas and increased the tractor fleet by about a third. Annual revenues also grew with the acquisition, rising to about $70 million for Southlake, Texas-based Andrews Logistics.
“This acquisition was an incredible opportunity for us,” says J Darron Eschle, chairman and chief executive officer of Andrews Logistics. “We believe it puts us on track to build up annual revenues to the $150-million range over the next 10 years. We see more acquisitions in our future.”
Brian Jarvis, president and chief operating officer, adds: “We had the opportunity to make this acquisition because of the close ownership relationship between the two companies. Bill and Gary Andrews (owners of Andrews Transport) supported the startup of Andrews Logistics in 1997.
“In October 2013, Bill decided the time was right to sell off Andrews Transport. He, Darron, and I worked together to cherry pick the best customers, best personnel, and best equipment from Andrews Transport. One of the most important managers we brought over from Andrews Transport was Randall Ingo, who is now our executive vice-president. He has extensive tank truck operations experience and was one of our mentors on tank truck issues when we started Andrews Logistics.
“The pieces of Andrews Transport that we purchased fit our operation almost seamlessly with very few transition issues. It was a fast transition, and much of the work was done in the first 90 days.”
Carefully managed
The carefully managed acquisition effort was typical of the way Andrews Logistics has succeeded over the course of less than two decades in business. Much thought has gone into building the asset-based transportation and logistics company that today specializes in liquid bulk and hazardous materials transport.
Andrews Logistics offers a broad range of logistics services, including dedicated contract carriage and freight management. Initially dry freight was a major focus because of Eschle’s background with J B Hunt, Ryder Systems Inc, and UPS Logistics and the ability of the company to quickly add revenue in that market. Tanker operations were always the long-term objective and were added gradually.
The focus changed radically after the carrier’s largest dry freight customer went bankrupt at the beginning of the recession in 2008. “Dry van operations accounted for about 65% of our activity at that time,” Eschle says. “Today, liquid bulk cargoes (specifically lubricants and general chemicals) account for 85% of our activity and dry vans make up less than 15% of the business.”
Dry van activity will not go away completely because Andrews Logistics has some good customers (such as Walmart’s Sam’s Club) in that sector. In addition, key lubricants customers need some niches services in the dry van sector, and Andrews Logistics is an easy choice to help out on special projects.
“We really don’t care what type of trailer is behind the tractor,” Eschle says. “We just want good customers that value safety and a high level of service at a fair rate.”
Lubricant dominance
Lubricants dominated the business that came over from Andrews Transport, which had primary operations in the Gulf Coast States. Andrews Logistics also picked up some new business hauling jet fuel.
Accompanying the Andrews Transport business were six terminals in Texas and Louisiana. Terminals in the Dallas/Fort Worth, Texas area, Houston, Texas area, and Baton Rouge, Louisiana were merged with existing Andrews Logistics facilities in those locations.
With the additions, Andrews Logistics now has terminals in Baton Rouge; Beaumont, Diboll, Tyler, La Porte, and Dallas, Texas; Los Angeles and Richmond, California; Tampa, Florida; Granite City, Illinois; Canton, Ohio; Aliquippa and Allentown, Pennsylvania; and Rahway, New Jersey.
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The most impressive of the facilities has to be the new 17,500-sq-ft terminal in La Porte. Occupying 12 acres in the heart of the petrochemical production sector in the Houston area, this is the largest terminal in the Andrews Logistics system.
Under construction when the deal with Andrews Transport was being negotiated, the terminal opened March 21. Construction took six months and included moving a quarter million yards of dirt to raise the property elevation by four feet.
Offices at the front of the building accommodate managers, load planners and dispatchers just for the Houston-area business. Preventive maintenance and routine service of tractors and trailers are handled in the five-bay shop. The most notable feature in the building is the spacious driver room, complete with pool table and large-screen televisions.
“We believe this new terminal will enable us to attract and retain the best truck drivers in the industry,” Eschle says. “This is part of our effort to be the best employer in the tank truck industry.”
In time, a significant percentage of the carrier’s tractors and tank trailers are likely to be based at the La Porte terminal. System wide, Andrews Logistics runs 340 tractors, 600 tank trailers, and 150 dry vans.
Fleet range
The fleet operates across much of the United States, with trips ranging from five miles to 3,000 miles. Average trip distance is 350 miles.
“We go where our customers need us to go, Eschle says. Our objective is to pick up and deliver on time in the safest and most efficient manner possible. Two key factors help ensure that we meet that objective. One, we are working hard to be the best employer in the tank truck industry. Two, we have made safety a primary objective for every employee.”
Dispatchers are a critical part of the customer-service process. Dispatchers must be able to work well with customers and drivers to ensure that loads are handled safely and in a timely manner.
“You can’t replace a dispatcher with technology,” Eschle says. “We believe three key factors lead to success for a dispatcher. They must demonstrate a good work ethic, integrity, and initiative. Drivers know how to do their job; they just need a leader to guide them to do the right thing each day on a consistent basis.”
Dispatchers are a key factor in driver retention. “The shortage of qualified drivers is becoming a critical issue for us,” Eschle says. “Demand for our service is at a record high, and we have more liquid bulk cargo than drivers. We’ve never had more people calling for trucks. We need more drivers.”
While about 100 drivers came over with the Andrews Transport acquisition, it did little to improve the driver supply. Many of those drivers continued hauling the cargoes they were already handling.
“We’re working hard on driver recruiting and retention,” Eschle says. “We’re recruiting from other trucking sectors, and we are offering good pay and benefits. However, we have not relaxed any of our driver qualifications. We won’t do anything that would jeopardize safety even if that means we are still short of drivers.”
Andrews Logistics wants drivers who have the qualifications and versatility to work in any part of the operation. In addition, anyone wanting to work for the company absolutely must embrace the safety program, and that requirement is made abundantly clear during the hiring process.
Safety rewards
The single-minded focus on safety has brought plenty of rewards for the carrier. The company recently was honored by Chevron Lubricants for best customer service and BPCastrol’s Carrier of the Year for the Lubricants Group.
In 2010, Andrews Logistics was singled out for National Tank Truck Carriers’ top annual safety award—the Heil Outstanding Performance Trophy. Andrews Logistics was the youngest tank truck carrier to earn that award. Griff Odgers, Andrews Logistics vice-president of safety and risk management, also was named NTTC Safety Director of the Year.
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Newly hired drivers spend a day and a half to two days in an orientation program that covers government mandated training and company policies and procedures. That is followed by one to three weeks of on-the-job training (OJT).
A cadre of Master Driver Trainers handles OJT. Each Andrews Logistics location has at least one Master Driver Trainer, and no newly hired driver goes out on the road by himself until the trainer signs off.
During the training and OJT, drivers learn that they have an active role to play in Andrews Logistics’ award-winning safety program. Drivers share the responsibility for organizing and conducting local safety meetings. They help review the previous month’s safety performance and they help make presentations.
Driver role
While drivers play a role in the mandatory monthly safety meetings, terminal managers have the primary responsibility for those meetings. The corporate safety department sets a general monthly theme, but each terminal tweaks the program to meet local needs.
Terminal manager involvement goes well beyond safety meetings. “We make it crystal clear that they are responsible for ensuring that our drivers run safe and legal,” says Odgers. “Terminal managers are held accountable for that.”
An up-to-date and well-maintained tractor fleet also is part of the safety program. “It’s important to run equipment that is in the best possible condition,” Eschle says. “Regular replacement also ensures that we have the latest technology.”
Fleet variety
The fleet currently includes Peterbilt Model 386s and Kenworth T800s—both with 63-inch mid-roof sleepers—and Volvo VNL630s. Currently in service are 310 Peterbilt and Kenworth tractors and 30 Volvos.
“We just bought the 30 Volvos as a trial,” Eschle says. “We tested two units over a six-month period and we liked the fuel economy we were getting with them.”
The Volvos were specified with the XE package that includes a 455-horsepower D-13 engine and Volvo I-Shift automated transmission. Most of the Petes have a Cummins ISX15 engine rated at 435 horsepower and a 10-speed Eaton transmission. Some of the newest Petes were specified with Eaton’s UltraShift Plus automated transmission.
“We’re trying the automated transmissions to see if they are more cost effective, and help improve driver performance and efficiency,” Eschle says. “We also hope that they will help us attract younger drivers.”
The carrier is in the process of installing PeopleNet on-board computers across the entire tractor fleet, and all late model and newly acquired tractors have Thermo King’s TriPac auxiliary power unit. Bendix roll stability has been standard for years. Roper product pumps are used throughout the fleet and are powered by Muncie PTOs.
Tank trailers
Polar Tank Trailer is the primary supplier of tank trailers. Lubricants are hauled in DOT406 trailers with capacities ranging from 9,000 to 9,500 gallons. Lubricants also are carried in 9,200-gallon DOT407 aluminum crude oil trailers. For general chemical applications, the carrier runs 7,000-gallon DOT407 insulated stainless steel trailers.
Tank hardware includes Betts internal valves, Civacon and Emco Wheaton API adapters, Civacon and Scully overfill protection, Garnet level gauges on crude oil trailers, and Girard pressure-relief vents. Product hoses are supplied by Hart Industries. Running gear includes Hendrickson Intraax air suspension systems with the Tiremaax inflation system, and Alcoa and Accuride aluminum disc wheels.
With its recent acquisition and its sharp focus on customers, Andrews Logistics has been positioned for steady growth as a provider of dedicated contract carriage, bulk liquid transport, and freight management services. ♦
