Tank fleet profits continue slide

For the third year in a row, tank truck carriers struggled to make a profit. However, most fleets were able to eke out at least a small revenue increase in 2007, and productivity improvements continued.

Just over 60% of the carriers participating in this year's Bulk Transporter Annual Gross Revenue Report posted higher revenues. That was down slightly from about 63% of participating fleets in 2006. In addition, operating ratios worsened for 78% of the participants in this report.

What ate up profits? Fuel played a big role, surpassing labor as the largest expense for some tank truck carriers. Overall, the trucking industry spent $112.6 billion on fuel in 2007 as the price of a gallon of diesel topped $3.30. Among other factors eating at profits were rising healthcare costs, increased vehicle purchase and maintenance costs, and inflation in the general economy.

Economic turbulence brought more consolidation of the tank truck industry in 2007. For instance, Trimac Transportation Services purchased the business and assets of Logistics Express Inc. A&R Logistics Inc (holding company for Transport, A&R Global Logistics, and A&R Packaging and Distribution) acquired Alliance Logistics Inc and MCB Services.

Top 10 tank truck carriers found profits just as elusive as the rest of the industry. While all but one of the Top 10 posted revenue increases from 2006 to 2007, just two showed improved operating ratios.

Quality Distribution Inc maintained its hold on the top spot, followed closely by the Trimac Group of Companies and Kenan Advantage Group. Rounding out the Top 10 were Superior Bulk Logistics Inc, Groendyke Transport Inc, A&R Transport Inc, Enterprise Transportation Co, Schneider National Bulk Carriers, Foodliner/Quest Liner Inc, and Tankstar USA Inc.

Combined Top 10 revenues were $3.2 billion in 2007, a small improvement over 2006. Top 10 revenues in 2007 accounted for 53.8% of the total in the report.

The Top 25 carriers had $4.6 billion in revenues, or 77% of the total represented in this report. That was an increase over the $4.4 billion in revenues reported by the Top 25 in 2006.

Total 2007 revenues for all 77 tank truck carriers in this report were $6,013,994,463. In contrast, the 80 carriers in the 2006 report accounted for a combined total of $5,894,691,407.

Average revenue in 2007 was $77,959,737, up $4.2 million from the average of $73,683,642 in 2006. The average grew by the same amount from 2005 to 2006. The median carrier on the list, the one with an equal number of carriers above and below it, had revenues of $33,200,000. In 2006, the median carrier revenue was $31,180,000.

Operating ratios for both 2007 and 2006 were supplied by 59 of the carriers in this report. Just 14 — less than a quarter — showed improvement over the previous year. The operating ratio represents operating expenses as a percentage of revenue.

Thirty-seven had operating ratios between 95.0% and 99.9% (compared with 36 in 2006), and one had a ratio above 100%. Ratios between 90.0% and 94.9% were reported by 21 carriers, down two from the previous year.

Most of the fleets participating in the 2007 report submitted data used to calculate tractor revenues. These numbers give an indication of productivity levels. The average for 2007 was $207,109, a healthy increase over the $180,723 average in 2006.

Eight of the Top 10 reported tractor revenues, averaging $198,331. This was a small increase over the $195,781 average reported by the Top 10 in 2006.

The best productivity (tractor revenue of $367,642) came from a Northeast petroleum hauler. The lowest tractor revenue ($96,037) was posted by a mixed tank fleet operator based in the Midwest.

The number of petroleum carriers exceeding the $300,000 mark for tractor revenues continued to increase in 2007. Average revenue per tractor for a representative group of eight petroleum haulers was $270,491, up from the previous year's average of $238,158. The lowest tractor revenue posted by a petroleum fleet was $173,757.

Ten chemical haulers accounted for average revenue per tractor of $203,795, up from $196,571 in 2006. Chemical tractor revenue ranged from a high of $335,802 down to $145,348.

Average tractor revenue for five dry bulk specialists was $173,082, a healthy increase from a $155,311 average in 2006. Dry bulk tractor revenue ranged from a high of $218,856 to a low of $133,059.

Among three carriers that focus on transporting liquid and dry foods, tractor revenue averaged $178,738, a good increase over the 2006 average of $156,820. The high for the category was $188,344.

Many of the figures here are from preaudited reports, and some may include nonbulk revenues or revenues from subsidiary tank truck carriers. In all cases, the numbers were supplied directly to Bulk Transporter. The staff greatly appreciates the cooperation of all who helped in the preparation of this report.

To view a chart with this year's ranking and revenues, use the "Related" link below to find it and all reports going back to 2001 in the Gross Revenue Reports Archive.

Alphabetical cross-index of listed carriers