Purchases Double Iowa Tanklines' Size

May 1, 2000
Tanklines Inc, Omaha, Nebraska. And the shopping isn't over. In short order, the tank truck carrier purchased Wheeler Transport Service Inc, Omaha; Asphalt

Tanklines Inc, Omaha, Nebraska. And the shopping isn't over. In short order, the tank truck carrier purchased Wheeler Transport Service Inc, Omaha; Asphalt Express, Billings, Montana; and Fattor Transportation, Glenwood Springs, Colorado. The acquisitions sent annual revenues from around $7 million to $17 million. They also shifted the focus of Iowa Tanklines to the west.

"Last year was exciting and challenging for this company," says Keith Hohensee, Iowa Tanklines president. "We experienced tremendous growth that brought a lot of new opportunities. We still see ourselves as a regional carrier, but we have the size to devote substantial resources to the specific needs of customers.

"We're optimistic that we will meet our targets this year. It began well. A robust economy, combined with an early start to the spring agricultural season, means that freight is moving at a strong pace. Petroleum is at about the same level as last year, but we expect a good asphalt year.

"We're pursuing 10% to 15% annual growth, not including acquisitions. We want to increase marketshare, and we will do that internally or externally. We're actively looking for more acquisitions."

Opportunity and Change Last year's purchases brought plenty of change and opportunity. The Wheeler Transport deal not only shifted the focus westward but also gave Iowa Tanklines a more diversified product base. Asphalt hauling, a new opportunity for Iowa Tanklines, came with the Asphalt Express asset acquisition. Fattor Transportation was an asset acquisition of a Colorado petroleum jobber fleet.

Besides asphalt and refined petroleum, the carrier hauls ethanol, propane, anhydrous ammonia, liquid fertilizer, herbicides, lube oil, antifreeze, and general chemicals. "We're a very typical midwestern tank fleet," Hohensee says. "The ag market has a big influence on our operation. We do a little of just about everything."

Many of the products are seasonal, but carrier management has worked hard to build seasonal diversity. Ag product shipments start in the early spring, with fertilizer running heavy through April and herbicides through May. A smaller season for ag products resumes in the fall.

Asphalt ramps up in April and usually runs through early to mid fall. There is a small amount of winter fill business for asphalt, but propane and alcohol account for more of the winter hauling. Gasoline provides year-round activity.

Carrier management is always on the lookout for new opportunities. For instance, the Asphalt Express acquisition gave Iowa Tanklines an opportunity to bid on a contract to become the single-source logistics manager for the Koch Performance Asphalt plants in Pueblo and Commerce City, Colorado, and Salt Lake City and Woods Cross, Utah.

"This is really a partnership because we are putting our dispatchers into the plants," says Chuck Simmons, Iowa Tanklines vice-president. "We will direct the transport operations, using our equipment as well as that of other carriers.

"Five years ago, we would have turned up our noses at the idea of working with other carriers. Today, we see this as an opportunity for growth and geographic expansion. It's a way to compete with the mega carriers."

Growing Fleet Within its own fleet, Iowa Tanklines now has up to 350 tractors and 250 trailers dispersed among locations in Iowa, Nebraska, Colorado, Kansas, Wyoming, and Utah. Terminals are in Bettendorf, Webster City, and Des Moines, Iowa; Omaha, Beatrice, and Aurora, Nebraska; Denver, Colorado; and Salt Lake City.

Operations are directed by central dispatch offices in Omaha, Aurora, and Denver. The Omaha office handles activities in Iowa and eastern Nebraska.

The Aurora office concentrates on the rest of Nebraska and Kansas. Everything west of that is in the hands of the Denver office, with the exception of the Salt Lake City asphalt business, which is managed locally.

Dispatch operations have been improved with the installation of customized software from McIntosh Software Services Inc. The dispatch module was designed for tank truck operations and meets the needs of shorthaul, multiple delivery, and gasoline operations.

Qualcomm satellite tracking units make life easier for the dispatchers. Not only do they pinpoint a tractor-trailer rig location, but they offer an efficient, fast means of transmitting billing information and other reports.

The Qualcomm units are installed on tractors in gasoline and herbicide service.

Trip Distances Trip distances vary widely depending on where a tractor is based and the cargo it hauls. For instance, 30 miles is the average for petroleum loads in the Omaha area. Petroleum shipments out of Denver could go as much as 300 miles. Simmons points out that 80% of the gasoline distributed in Colorado is shipped from Denver.

Asphalt movements are under 100 miles in Iowa. The carrier anticipates that typical hauls with the new Utah operation will be 150 miles, and it is estimating 300-mile hauls for asphalt in Colorado.

On the agricultural side, herbicides are all multi-stop, and they can generate some long trips. Anhydrous ammonia movements are generally less than 100 miles.

Owner-Operator Base Due to the nature of the operation, owner-operators play a big role, supplying a majority of the tractors. "Owner-operators go well with the seasonal mix of business," Simmons says. "Owner-operators work hard because they have a vested interest in the business. We don't use company trucks very much for the products that are assigned to owner-operators. We keep our company fleet in gasoline and other products that call for 24-hour operation."

Like many other tank truck carriers today, Iowa Tanklines has had difficulties at times attracting enough drivers, and that goes for owner-operators as well as company drivers. "We've probably lost a few loads for lack of drivers," Simmons says. "We recruit every day. We use word of mouth and advertisements in publications."

The carrier looks for candidates who are a minimum of 21 years old and have three years or more truck driving experience. Requirements also call for a 10-year employment history and a valid commercial driver license with tank and hazardous materials endorsements.

The applicant's driving record must be clear of driving under the influence, reckless driving convictions, and license revocations for the past five years. The applicant must not have been cited as a habitual violator in the past five years or for running more than 25 miles over the speed limit in the last three years.

While Iowa Tanklines has no set age limit for owner-operator tractors, the equipment must pass a detailed company inspection. Tractors are reinspected every 90 days, and monthly maintenance reports are submitted. PTOs are required on all owner-operator tractors.

Training Program Orientation and initial training of newly signed drivers take two to three days. Iowa Tanklines uses training materials from National Tank Truck Carriers Inc and Williams Knowledge Systems to cover tank operations and hazardous materials handling.

On-the-job training takes two to three weeks. During that time, the driver will ride or run with a trainer. Iowa Tanklines has trainers at each terminal.

"We stress safety throughout the training, and we reinforce the message for all of our drivers with safety meetings that are held at least twice a year," says Rick George, Iowa Tanklines safety director.

The meetings last one to two hours and touch on a number of topics, including customer issues. Training aspects at past meetings have included a presentation of the Stop Critical Crashes program developed by Great West Insurance.

Maintenance problems are discussed. Drivers are reminded that they are the first line of defense in keeping vehicles in top operating shape. "Safety is our first concern, but we also work very hard to avoid out-of-service citations at DOT (Department of Transportation) roadside inspections," George says. "Our out-of-service rate is down to 12% while the national average is in the 20% range. We encourage driver involvement by paying $50 for each roadside inspection they pass."

The preventive maintenance program for company-owned tractors starts with an inspection and chassis lube at 5,000-mile intervals. Engine oiland filter are changed at 15,000 miles. Federally required annual inspections are performed with every oil change.

Trailers in regular service are inspected and serviced on the same schedule as the tractors. Trailers that don't run constantly are on a mileage schedule.

Going beyond the maintenance program, the trailer fleet is watched closely. Revenue projections are being developed for each trailer, and the carrier is getting rid of equipment that isn't active enough.

"Our policy is use it or lose it," Simmons says. "We can't keep equipment around that runs just two to three weeks a year."

Gasoline Tanks Gasoline trailers account for a significant number of the tanks in the fleet, and 30 of them are on 24-hour operation. Simmons says it would be ideal if all of the petroleum trailers in the fleet were running around the clock. Primary suppliers of the MC306 and DOT406 trailers are Beall Trailer Inc and Heil Trailer International. The newest units have four compartments and a 9,500-gallon capacity. Equipment includes the Scully Load-Anywhere, Go-Anywhere system, Emco Wheaton internal valves and bottom-loading adapters, and Betts domelids.

For herbicides and other chemicals, the carrier runs MC307 and DOT407 trailers. The fleet includes both insulated and uninsulated stainless steel tanks, and capacities range from 5,500 to 7,500 gallons. Most are purchased from Polar Tank Trailer Inc.

A metering system with a Neptune Bestrac meter is mounted on the trailers used in herbicide service. The meter package is removed and stored when the season ends.

Propane and anhydrous ammonia are transported in MC330/331 trailers. Iowa Tanklines has 10 of its own and also pulls tanks belonging to customers. Nineteen are leased from Farmland Industries and another 13 are from Growmark.

Asphalt may be a new area, but the carrier now has 48 elevated temperature units in service. Of these, 35 are constructed of aluminum and 13 are carbon steel. Most were built by Polar and have capacities ranging from 5,000 to 7,000 gallons.

Several makes of tractors are in the company-owned fleet, including Kenworth, Mack, and Freightliner. Weight is a consideration in the fleet, and the newest Macks weigh in at around 14,600 pounds. The newest Kenworths tip the scale at 16,000 pounds.

These Kenworths are W900 longnose conventionals that have been specified to be as attractive as is practical to drivers. They have 500-horsepower Detroit Diesel Series 60 engines, nine-speed Fuller transmissions, and Eaton tandem-drive axles. Other equipment includes aluminum wheels and hubs and 11R22.5 Goodyear and Firestone tires.

The equipment gives Iowa Tanklines the ability to meet the needs of just about any liquid bulk shipper in the region it serves. The carrier is always on the lookout for still more opportunities.