NTTC Chairman

In addition to Schaupp's grandparents, family members active in the business have included his mother, Joan, Uncle Jack Pomprowitz, and father, Bob Schaupp. His parents remain active in the business today.

LCL Bulk Transport specializes in hauling liquid chocolate and other liquid foods, but the company was more diversified in the past. At one time operations included a less-than-truckload division and refrigerated trucking.

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“We hauled a lot of meat and other food products at one point,” Schaupp says. “Food was always at the heart of our company, though.”

When deregulation hit in the 1980s, the carrier's freight and LTL business suffered. Management felt the operating model was no longer sustainable and, the company exited those businesses and shifted its focus to tank truck operations.

“We had purchased a tank truck carrier in the early 1970s — a milk hauler in Elkhorn, Wisconsin,” Schaupp says. “It was called the O'Donell Company. We closed our freight division in 1989, and concentrated our efforts on building the tank operation.”

Schaupp saw the full transition from freight hauler to tank truck carrier. Growing up, worked as a mechanic helper, picked up parts, worked on the loading dock. “It's a great way to learn the business,” he says. “You start at the bottom and work your way up.”

He formally joined the company a couple of years after graduating from college in 1983. “Growing up in a family business like this, it is always in your heart and in the back of your mind to work in the business,” he says. “It is always a part of who you are.

“There was never an expectation that I would work in the family business. It was never ‘you have to work here.’ It was more ‘you should want to work here; you should want to be a part of the family business.’ My parents gave me the opportunity to decide for myself whether I liked the business.”

Attendance at NTTC meetings started early. “Our family began attending NTTC meetings in the 1970s,” Schaupp says. “I saw people I admired move up through the leadership ranks. I became a lot more active about 10 years ago, and I became a lot more active about six years ago and began looking for more opportunities to serve the association. I joined committees, and worked with the NTTC staff on various projects.”

He saw a lot of changes in the industry and at NTTC in the past several years. At the association level, big changes started with Jeff McCaig when he kicked off the strategic planning effort during his year as NTTC chairman.

As Schaupp became more involved, he realized that it was critical for tank fleet executives to become more involved with the legislative and regulatory processes in Washington DC. That concern led to development of the “Call on Washington” program.

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“It is so important that we meet with elected officials to discuss issues such as changes in the hours of service,” he says. “How can government officials make changes in something like that without truckers being involved?

“We need to be able to tell congress what we need and how new laws and regulations affect our businesses. They are making well-intentioned laws, but they don't understand the impact of some of their actions.”

During a recent interview with Bulk Transporter, Schaupp discussed the current state of the tank truck industry and what NTTC is doing to help its members thrive.

BT: How would you characterize the state of the tank truck industry at this time?

Schaupp: Our industry is in a good state. A big reason is the energy boom that is underway. That has had a major positive impact on our industry and the US economy. The oilfield has brought a lot of opportunities for tank truck carriers, including crude oil hauling and hauling bulk materials for fracking and other operations.

Schaupp: Carriers would face much fiercer competition in the marketplace. That's not to say the market isn't competitive today, but it would be tougher. The oilfield had created opportunities for carriers to grow.

BT: How is the driver supply today?

Schaupp: It depends on the area of the country, and the market that you serve. Some areas have relatively low driver turnover, but it is considerably higher in other areas. Capacity is tightening as the economy grows in different areas, such as the oilfield.

We're all affected, even food haulers, by the oilfield demand for truck drivers and other workers. In addition, it is tougher today to attract new drivers. Fewer people want to get into the business.

BT: What are shipper-carrier relations like today?

Schaupp: We still have opportunities to build relationships with shippers, but the decision-making process is more data driven for many of them. Having said that, carriers that have an adequate driver supply will be in a better position in the marketplace.

BT: Do shippers want strong relationships with carriers?

Schaupp: Some shippers want a relationship, while others are bottom-dollar driven. However, I believe more shippers realize now that the market is favoring carriers and drivers. More of them understand that drivers need to make a good living and that the work environment is getting tougher and tougher. Probably 70% of the shippers understand the value of a driver.

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BT: Do shippers ask what they can do to make the job better for a driver?

Schaupp: Generally they don't. However, that is something we discuss with the shippers. For instance, we might point out that if the shipper can change this aspect of the job, we can work in another load per day for the driver.

BT: How do you deal with the shippers that won't work with you?

Schaupp: You look for other customers that do want a long-term partnership. We're looking for long-term partnerships at LCL Bulk Transport, and I believe that is true for most other tank truck carriers.

BT: Have we reached a point with the driver shortage where some shippers aren't able to get over-the-road transport?

Schaupp: I don't know that we are at that point today, but that day is approaching. I can see the time coming where some shippers may not be able to get trucks and drivers. Shippers must understand keeping our drivers busy and making money is vital to maintaining that valuable resource for their operational needs.

BT: Where does the tank truck industry stand with insurance availability and rates?

Schaupp: Rates are stable right now, but I sense they are heading up this year or next.

BT: What will be the impact on the tank truck industry as Obama Care is rolled?

Schaupp: It's still too early to tell, but we know costs are going up. We're trying to plan, but we don't have enough information. There is no question that rates will have to increase to cover higher health insurance costs.

BT: At this time, can you get as many drivers as you need?

Schaupp: It all depends on the day, the week, the month. Driver availability varies widely from one area to the next.

BT: What is the quality of the drivers applying for jobs?

Schaupp: You have to work very hard to find the top-quality drivers. You may have to look at 20 applicants to find one well-qualified candidate. It is very challenging.

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BT: what are the key issues for the tank truck industry?

Schaupp: The biggest issue today is to attract and retain drivers. We have to work with our shippers to make sure we can keep our drivers and our equipment busy. With the cost of equipment escalating, we cannot afford to have any equipment sitting idle.

BT: What should drivers be earning in terms of an annual salary?

Schaupp: They should be earning $45,000 to $70,000 a year, depending on where they are based in the United States.

BT: What does the tank truck industry need to do to gain more influence over the factors that affect the ability of companies and their employees to thrive economically?

Schaupp: As we saw with the “Call on Washington” that NTTC launched last year, it is critical that the leaders of the trucking companies that make up this industry in the United States get active politically. We cannot allow the bureaucrats and the elected officials to make laws and regulations that do not make sense or help us run our businesses.

We're seeing these problems with the proposed hours-of-service changes, Obamacare, and the new heavy-duty vehicle emissions. All of those actions have an impact on our businesses.

BT: Is the tank truck industry stirred up enough to do something?

Schaupp: I think it's starting. We'll hold our second “Call on Washington” in June. It's so important to go to Washington and sit down for face-to-face discussions with our elected officials and others to explain how legislative and regulatory actions affect us directly.

BT: What are your key concerns with the proposed hours-of-service changes?

Schaupp: My key concern is that each driver potentially could lose multiple hours of potential driving time weekly, which means lost income for the driver and lost productivity for us. It doesn't make any sense, because the proposed rule changes have not shown concrete evidence it will make our operations any safer. Safety is our number one priority in our company and the tank truck industry.

BT: What are the key concerns for liquid and dry bulk food haulers?

Schaupp: Our focus is on making sure that we meet our customer standards for cleanliness and security. We want to make sure that nothing interferes with the integrity of a food shipment.

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BT: How would food haulers be affected by the food security rules that were proposed during President Obama's first term?

Schaupp: I see no real impact. Food haulers already are going well beyond what those proposed rules would have required. Unfortunately, this president's administration sees many of those regulatory activities as an opportunity for new taxes and fees.

BT: With all of the regulatory activity, will more carriers be pushed out of the industry?

Schaupp: I think it will bring more industry consolidation due to increased government regulations. I'm somewhat surprised that we haven't seen more consolidation recently, but I think people in this industry really enjoy the business, and it's hard to give up something you love.

BT: Where does the industry stand with the proposed empty container rule from US Customs and Border Protection?

Schaupp: I think it will be implemented. We have had some issues with the proposal, but it looks like the problems are being addressed. It will affect any tank truck carrier moving loads to and from Canada and Mexico. It may change the way we do business, because we may have to clean more of the equipment before we return to the United States. It will raise our operating costs.

BT: what are your thoughts on the mandatory truck speed limiter rule that will take effect in May?

Schaupp: I have no problem with that. We have our fleet set at 65 miles per hour. I believe it is safer for trucks to run slower than the rest of traffic. Our experience suggests that when you slow down a truck, it should be a safer vehicle.

BT: Will slowing down trucks change the way tank fleets operate?

Schaupp: We will have to become more creative. We'll probably see more relay operations and such.

BT: What are your thoughts on the electronic logging rules that are scheduled to come out in September?

Schaupp: NTTC favors that rule, and LCL Bulk Transport is 100% on electronic logging. I don't see where it would have any effect on our business. We have benefitted from electronic logging because we have more data to manage our assets. Our drivers are very comfortable with electronic logging today, but there was quite a bit of uncertainty when we rolled out the program four years ago.

BT: How do you view the current efforts to block states from turning existing highways into toll roads?

Schaupp: I'm 100% in support of what ATA (the American Trucking Associations) has been doing on that front. Hopefully, the industry can continue to prevail. More toll roads mean higher operating costs for fleets and a higher cost of living for consumers. Toll costs have to be passed along. Tolls can add $50 to $200 per trip in some of the areas where our fleet operates.

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BT: With all of today's challenges, what is the future for the family-owned tank truck carrier?

Schaupp: I think there will always be a future for family-owned companies. They make up the heart of the US economy, and many people want to be part of a family company. It is meaningful to work for a family-owned company where you can feel like you are a part of the family. One thing I've always liked about America is that anybody can buy a truck, develop a business, and grow it.

BT: Can an owner-operator still build a business like that in today's world?

Schaupp: It will depend on the individual. I still believe that the entrepreneurial spirit exists in this country. There is absolutely still room in America for entrepreneurs. Cost of equipment may be the biggest challenge, but those who want to build a business will be able to find a way to do it.

BT: How important is NTTC to the industry today?

Schaupp: I believe it is a critical part of the tank truck industry, especially for the chemical and fuel haulers that are so heavily regulated. NTTC is the voice of the industry and represents us on Capitol Hill.

BT: What is the current focus at NTTC?

Schaupp: The organization continues to focus on the strategic planning efforts, updating the organizations bylaws, creating a more active board of directors, and making the association more carrier driven. We added staff to create more value for members.

We have the president transition from John (Conley) to Dan (Furth) taking place. One of my primary objectives was to make sure that goes smoothly. Transitions are never easy, but it is going well.

We'll continue with the meetings currently in place, and that includes the “Call on Washington” program we added last year. With the inaugural “Call on Washington,” we showed our members that they can make a difference. We can impact the regulatory process. I'd like to see 30 to 40 carrier members participate going forward.

I tasked John with writing a book on the history of the association and the tank truck industry in general. That is coming along. It should be published right around the time he retires or shortly after. The tank truck industry has a great story to tell, and we need to tell it.

BT: How would you characterize your year as NTTC chairman?

Schaupp: It was so rewarding. I learned so much. My father was chairman in 1990-91, and it is a great honor to follow in his path. ♦