DEMAND for propane is growing by about 5% a year in Mexico as the economy improves and population continues to increase. The biggest challenge facing the nation's propane marketers is keeping pace with demand.
That's a welcome challenge for Gas Express Nieto headquartered in Queretaro, Queretaro. Supported by a fleet of more than 2,000 bobtails, the company has grown to be the second largest propane distributor in Mexico and is aggressively expanding its branch network.
"We have branches in 21 cities now, and there are more to come," says Oliverio Alzaga Beltran, subdirector of the gas division at Empresas Nieto, parent company of Gas Express Nieto. "We will grow through internal expansion rather than by acquiring other companies. That's the way we have always done it.
"Propane is widely used in Mexico for cooking and heating in homes, hotels, and restaurants. The industrial market is growing, but residential customers still account for about half of the demand. The Mexican government promotes propane as a vehicle fuel, especially in urban areas such as Mexico City that have severe air pollution problems.
"As popular as propane is, most of our competition comes from other smaller propane distributors. Typically, these companies run no more than 16 bobtails. The natural gas market is just now developing and doesn't pose much of a threat at this time. However, we welcome competition because it encourages us to get better."
Empresas Nieto has been marketing propane in Mexico for about 50 years, with each branch operating under its own name. The Gas Express Nieto name was adopted companywide in late 1996. "We want to create a unified image for the company," Alzaga says.
Gas Express Nieto is one of four Autotanques Nieto business units. The Transport Division handles carriage of refined petroleum products and hauls all of the bulk propane shipments to Gas Express branches. Newly created this year, the Fructose Transport Division handles liquid sweeteners for Cargill Inc. The Commercial Division sells aftermarket truck parts among other things.
The Transport Division operates 350 tractors and 550 trailers. Included in the trailer fleet are a large number of MC331 tanks used in propane service. The Fructose Transport Division has 22 tractors and 22 foodgrade tank trailers.
The Gas Express Nieto bobtail fleet is growing as the company expands steadily into new markets. The company has added at least 15 new bobtails this year just to handle market growth.
Bobtails are based at Gas Express Nieto locations in seven of the 33 Mexican states: Guanajuato, Jalisco, Mexico, Michoacan, Nuevo Leon, Queretaro, Sinaloa, and Veracruz. The largest vehicle concentration, approximately 850 bobtails, is divided among three branches in the Mexico City area.
Each Gas Express Nieto branch has one or more bulk storage tanks, and the marketer has a total storage capacity of 16.5 million liters (4.3 million gallons). Storage tank capacity varies from 130,000 liters (34,300 gallons) to 250,000 liters (66,000 gallons).
Residential customers have 300-liter (79-gallon) or 30-liter (eight-gallon) cylinders. Restaurants and related businesses have storage tanks ranging from 1,500 to 2,000 liters (396 to 528 gallons), while industrial customers have tanks as large as 2,500 liters (660 gallons).
"The 30-liter cylinders are still very popular with many of our residential customers," says Carlos Mier Salazar, director general of the Gas Express Nieto branch in Queretaro, Queretaro. "The cylinders typically need a refill every 15 to 20 days. Refilled cylinders are dropped off and empties are collected by cylinder trucks that run routes just like the bobtails."
Customers often call for propane deliveries, but Gas Express Nieto also has a computer-scheduled refill program for the 300-liter and larger storage tanks. Residential tanks generally are on a 60- to 70-day refill schedule.
Customer deliveries are made Monday through Saturday, and bobtails handle about half of the propane distributed by each branch. The remainder is delivered in cylinders. Each driver typically works from 6:30 am to 4:30 pm and makes up to 30 deliveries per day.
Gas Express Nieto calculates a maximum of 45 minutes per delivery. One of the more challenging aspects of the job is that drivers must climb to reach customer storage tanks that are installed on the roofs of buildings in urban areas.
"Government regulations require the rooftop installation," Mier says. "Ventilation is good, which means there is less chance of fire or explosion if a leak develops."
Driver Hiring When hiring new bobtail drivers, Gas Express Nieto branch managers make it clear that the job can be demanding. To qualify for employment with the propane marketer, an applicant must be at least 21 years old and have a minimum of three years of truck driving experience. Previous propane handling experience is a plus.
A recommendation letter from the previous employer is required, and Gas Express Nieto managers ask the past employer for a detailed assessment of the applicant's work habits and capabilities. Mexican law does not inhibit such investigations, Mier says.
Training of newly hired drivers takes about three weeks. Training covers hazardous materials regulations, emergency procedures including firefighting, and basic vehicle maintenance skills. Considerable time is spent learning to operate the product delivery hardware on the bobtails.
Truck Variety Drivers are assigned to a varied fleet of bobtails. "We have a lot more truck choices now in Mexico," says Antonio Gantus Flores, transport division maintenance engineer. "We have added quite a few Ford and Mercedes-Benz medium trucks. We're also testing Freightliner and Kenworth units.
"We especially like the Ford units because they are available with factory-installed LP-gas fuel systems. As a propane marketer, we believe it's important to show our customers that we have confidence in propane as a vehicle fuel."
Most of the Fords are F700s with 7.0 liter V-8 engines, five-speed manual transmissions, and two-speed drive axles. The propane fuel system includes Impco carburetion and a single 58-gallon Manchester fuel tank.
The L1417 Mercedes-Benz bobtails in the fleet are diesel powered. Assembled from knock-down kits that are shipped in from Brazil, the trucks have 170-horsepower Mercedes-Benz OM 366 LA engines, five-speed manual transmissions, and power steering.
Gas Express Nieto is testing several other truck makes, including Kenworth and Freightliner medium-duty units. A Kenworth T300 has been in service since last year and is outfitted with a 210-hp Caterpillar 3126 engine, Allison automatic transmission, power steering, air suspension, and air-ride driver seat.
A Freightliner FL70 Business Class truck was added to the fleet in May. The truck has a 275-hp Cummins engine, six-speed Fuller transmission, and Rockwell drive axle.
Most of the bobtails have cast-spoke wheels with radial tires, but the Kenworth and Freightliner trucks came with steel disc wheels. Only new tires are used on the trucks. "We generally don't put retreads on bobtails because they operate in a very punishing environment," Gantus says. "We do everything we can to avoid tire problems."
MC331 Tanks Pressure vessels on the bobtails are fabricated by TATSA, the Trinity Industries licensee in Mexico. Most of the trucks in the fleet carry tanks with either of two capacities: 12,500 liters (3,300 gallons) or 17,000 liters (4,490 gallons).
However, some of the newest additions to the bobtail fleet have 5,500-liter (1,400-gallon) tanks. "We're using these smaller Ford trucks in urban areas where we encounter a lot of traffic and narrow streets," Mier says.
Built to MC331 standards, the tanks have RegO internal valves. Both Blackmer and Corken pumps are specified in the Gas Express Nieto bobtail fleet. Housed in a full-width cabinet at the rear of the bobtails is the delivery equipment, which includes a Neptune meter, Hannay or CMS reel with 40 meters (130 feet) of Dayco one-inch hose, and RegO nozzle.
Gas Express Nieto is converting the fleet to Neptune's Bestrac computerized meter. "This meter gives a more precise delivery record for our customers," Gantus says. "It's been an expensive project, but we're just about done. We started in 1996 with the bobtails that are based in the Mexico City area."
Maintenance Focus Demand for propane stays fairly constant throughout the year in Mexico, which means the Gas Express Nieto fleet stays busy. Most of the branch locations have small maintenance shops where routine preventive maintenance is performed. Major repairs are handled at the Autotanques Nieto headquarters terminal in Queretaro.
Maintenance facilities in Queretaro include a full machine shop for engine rebuild and conversion to propane fuel. A clean room is available for diesel engine injector rebuild. The maintenance complex also has a Hunter computerized front-end alignment system, brake relining equipment, and a Bandag tire retreading operation.
The central objective of the truck maintenance program is to ensure that bobtails perform reliably throughout their service life. In the past, the propane marketer had no set schedule for vehicle replacement. The company is beginning to implement a five-year cycle.
Pressure vessel testing and service is contracted out to TATSA in Huehuetoca, Mexico, which is between Mexico City and Queretaro. Mexico requires pressure vessel testing every five years and internal valve replacement at two-year intervals.
The maintenance program is part of an overall effort designed to give customers the best possible service. "We do everything we can to make sure our customers have the propane they need when they need it," says Oliverio Alzaga Beltran of the gas division at Empresas Nieto.