HIGHWAY Transport Inc has entered the final stages of a major upgrade program for its tank cleaning operations. Improvements include refurbishment of two of the carrier's four wash racks and the system-wide rollout of new tank cleaning management software.
Several million dollars were spent on the upgrade effort, which has been underway since early 2003. Primary objectives for the Knoxville, Tennessee-based tank truck carrier were to maximize fleet utilization, reduce paperwork and operating costs, and boost profitability.
“We want to be able to load a tank trailer four to six hours after arriving at a wash rack,” says Gary L Reagan, Highway Transport vice-president of operations. “We're turning some trailers faster than that. We have to because our fleet is very busy right now.
“Maximizing equipment utilization is part of our overall effort at Highway Transport to boost profitability. Tank cleaning also affects profits because it is a big cost factor in its own right. We evaluate our processes to eliminate cost and unnecessary delays. With the new hours-of-service regulations, an unnecessary delay is costly for our drivers and affects service to our customers.”
Greg Watkins, Highway Transport president, adds that the carrier is fine-tuning every aspect of its operation in a drive to achieve at least a 93% operating ratio. “We need that to justify continued reinvestment in this company,” he says. “We're on track, and we know the tank cleaning and facility upgrades are helping.”
Cleaning cost certainly isn't the sole economic factor affecting the tank truck carrier. For instance, the new hours-of-service rules that took effect in January had a bigger-than-expected impact.
“Hours of service hit us harder than expected, especially in the regional chemical hauling sector,” Watkins says. “We basically lost two hours of driving time per shift, which hurts us and our drivers. We believe this is one reason we're seeing quite a bit of shrinkage in the owner-operator supply right now. We're down to 70 in our own fleet. We've added 18 company drivers to take up the slack.
“We're looking at various ways to offset the hours-of-service productivity losses. We have to take action because every delay means lost work for the truck and less income for the driver. For instance, we're exploring the practicality of slip-seating tractors and night deliveries for some of our chemicals business. We're doing as much preloading as possible but we don't want to significantly expand our trailer fleet. We've already increased hours-of-service accessorial charges, and we've reduced free hours for our customers from two to one.”
Highway Transport drivers are being asked to help out in a campaign to eliminate unnecessary delays related to deliveries. “We take the information drivers give us, and we discuss options with our customers,” Watkins says. “The effort is still a work in progress, but we're making headway.”
Even as the carrier works to offset lost productivity related to hours of service, there is the realization that driver wages will have to increase substantially this year. This increase comes on top of driver wage hikes of 90% over the past 10 years.
Insurance costs also continue to rise, and this is impacting more than just US operations. A US requirement for $5 million worth of liability coverage for Mexican truckers shuttling hazmat shipments back and forth across the US-Mexico border is bringing a big change in Highway Transport's Mexico interline operations.
“We're going to move our own shipments into and out of Mexico,” Watkins sys. “Our Mexican partner, Transportes Larmex, has a terminal in Colombia (Nuevo Leon), and we're set to begin dropping and collecting trailers at their facility. We'll also handle customs clearance in coordination with our shippers.
“We're basically removing the middleman with this change. We already have Spanish-speaking drivers. This operational change will enable us to improve security, reduce transit times, and hold down costs.”
New equipment purchases are another way Highway Transport is saving money. The tank truck carrier plans to hold onto tractors for seven years, rather than five. Stainless steel tank trailers remain on a 15-year replacement cycle.
“We'll buy just 45 new tractors this year, counting both replacement and fleet expansion,” Watkins says. “On the trailer side, we plan to purchase 25 stainless steel, three-compartment units. We'll also lease some four-compartment chemical tanks.”
Extended lifecycles should bring significant savings for a fleet that consists of 172 company tractors. Total tractor fleet size is 242 including owner-operator vehicles. Highway Transport also runs 383 chemical trailers, 16% of which are multicompartment units. Seventy-seven of the trailers are specialized tanks with heat exchangers for glacial acrylic acid.
The Highway Transport fleet runs throughout North America operating from terminals in Knoxville, Chattanooga, and Nashville, Tennessee; Chicago, Illinois; Pedricktown, New Jersey; Charlotte, North Carolina; LaPorte, Texas; Roanoke, Virginia; and Florence, Kentucky.
Most of the terminals have maintenance shops, and four locations — Knoxville, Chattanooga, LaPorte, and Florence — have wash racks. The racks primarily clean Highway Transport equipment. An exception is equipment from other companies that haul loads for Highway Logistics, the carrier's third-party logistics provider.
“Our Highway Logistics division works with 30 to 40 carriers that handle excess loads for us,” Reagan says. “It gives us a lot more flexibility. We clean their equipment as needed.”
Terminal capabilities were aggressively upgraded over the past three years in a drive to boost productivity, efficiency, and security. The millions of dollars that went into the cleaning program are just a part of it.
“We invest our capital where we'll get the best payback,” Watkins says. “The LaPorte terminal is a very good example. Our business out of that terminal increased 95% in a single year, and the upgrades played a role in that growth.”
Purchased from Enterprise Transportation in 1983, the LaPorte terminal is the busiest in the Highway Transport system. The terminal is home to 70 tractors and 100 tank trailers and handles 300 to 500 loads a month. The two-bay wash rack at the terminal performs about 325-400 tank cleanings a month.
“This terminal gets a lot of business because it's in an excellent location,” says Barry Hall, LaPorte terminal manager. “We're right in the midst of a large number of chemical plants. All of our regular customers are within 25 miles.”
The upgrade process was finished in early 2003 and included a significant expansion of the facility, which occupies approximately seven acres. New offices were constructed, and trailer parking was increased considerably. A four-inch asphalt base was put down on stabilized soil in the trailer parking area.
Turning to the wash rack, the contractor literally gutted the building. All that remained in place were the beams and foundation. The building was rebuilt with a new roof, new metal siding, and a new lighting system. The floor was sealed and refinished.
Several improvements were made in the vat-style cleaning system that had been in place since Highway Transport had occupied the facility. Among things, the hot water and latex stripper vats were insulated. The WCM Group directed the wash rack renovation.
The wash system in LaPorte is similar to the cleaning equipment in place at the carrier's three other wash racks, and was designed in-house. The vat system includes four 1,000-gallon stainless steel tanks for hot caustic, hot water, Green Strip latex stripper from Montgomery, and cold water. Steam and hot water come from an 80-horsepower boiler. Sellers and Gamajet spinners and Gates high-pressure hoses are used. vA new wastewater treatment system was installed. Manufactured by Milieu-Nomics Inc, the new dissolved-air-floatation (DAF) unit can treat 25 gallons of wastewater per minute. The system handles biological oxygen demand, chemical oxygen demand, and solids removal. Treated water is released into the city sewer.
“We've used DAF treatment at this wash rack for many years, and it's done a good job for us,” Hall says. “We just needed something more up to date. We have a lot of experience with DAF treatment, and we believe it's important to stick with what we know.”
Unlike many Houston, Texas-area wash racks, the Highway Transport facility hasn't needed a flare or other vapor destruction capabilities. “Under our Texas air permit, we don't clean tank trailers that haul products with a high vapor content,” Hall says.
The LaPorte wash rack wasn't the only Highway Transport tank wash to get an upgrade. A new oil/grease separator system was installed. Wash bay floors and drains were upgraded, and a new boiler was installed. The Florence system was operational in January. vMore security
Facility security was another big part of the terminal upgrade effort. LaPorte was one of six Highway Transport terminals targeted for significant security enhancements. Four terminals have been completed, and the last two are in the final stages.
Terminals are being fully fenced with remote-actuated gates to limit and control access. Monitoring systems supplied by General Solutions include Panasonic 360-degree digital video cameras that are motion-activated.
Image downloads from the video cameras are available online over the Highway Transport intranet to key managers. In addition, only supervisors can actuate the gates to allow drivers and vehicles to enter and exit the terminal.
Cleaning software vThe final stage of the upgrade project involves a rollout of tank cleaning management software from TMTsoftware Company. Along with the new cleaning management system, Highway Transport is installing wireless network capabilities in its wash racks and repair shops. “We find that it's more cost efficient and easier to set up a wireless infrastructure in these facilities,” Reagan says.
TMT modified its Transman Maintenance Management program to meet the requirements of tank cleaning. Most importantly, the TMT product is a scalable system that integrates with TMW Suite fleet management and Microsoft Great Plains accounting products.
“We began work on the TMT wash rack management system in August 2003,” says Larry Edwards, Highway Transport director of maintenance, tank cleaning & environment. “Our Knoxville wash rack was the first to go on line in February, and we'll roll out the software to our other three racks by mid year.
“We chose the TMT product for its flexibility and ability to be customized. We believe there is a lot of similarity between maintenance and cleaning, and the TMT staff was willing to work closely with us to make the necessary modifications. We're also going to install the Transman Maintenance Management program in our shops.
“Our objective was an integrated system that would share data throughout our company, and Transman works very well with TMW Suite and Great Plains. With the TMT product, we import tank and product data from TMW and then output billing information to Great Plains. The integration of all this data is incredible.
“We want single-data entry to limit the opportunity for errors. It's also more efficient and reduces paperwork, which lowers our operating cost. Our tank cleaners bought into the system right away.”
One reason the system appeals to tank cleaners is that it incorporates bar-code data entry with a touch-screen monitor. “We tried to keep it as simple as possible by bar coding the cleaning processes and services,” says Alan Tomlinson, TMT vice-president, consulting services.
Working in TMW Suite, operations personnel at Highway Transport input cleaning requirements for each shipment to meet customer needs. The cleaning details can include comments and special instruction. Commodity detail also is recorded in the TMW dispatch module. In fact, TMW Suite manages all of the details if a tank trailer is to be cleaned at a third-party wash rack.
For tanks going to Highway Transport's four racks, cleaning-related data is shared with the new cleaning module in the TMT Transman system. This information is available to tank cleaners and managers throughout Highway Transport. A centralized cleaning plan is generated, and an estimated time in and time out is listed for each upcoming trailer.
“With this new system, we're planning each tank cleaning even before a trailer hits the road,” Edwards says. “Our tank cleaners will know the priority of each trailer arriving at a wash rack. We have the flexibility to change the cleaning priority as needed, and the updates are available immediately.
“A time clock runs with each job so we can see how long it's taking to wash a trailer. A cleaning certificate is printed out at the conclusion of each wash.
“Managers can monitor cleaning operations throughout our system. Information in the system is color-coded so we can see the progress of each job. We even know who is cleaning a tank, and the system won't let the workers skip steps. Managers also have access to a complete wash history on every trailer in our fleet.”
With its tank cleaning, wastewater treatment, and security upgrades, Highway Transport has significantly enhanced the capabilities of its terminal network. The improvements couldn't have come at a better time as the US economy continues to gain strength and chemical shipment volumes surge.