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Transpormex achieves strong growth with vibrant tank, reefer programs

DIVERSIFICATION has been good for Grupo Transpormex SA de CV. It is a big reason why the Mexican trucking company grew by a whopping 35% in 2004 and why the carrier could do even better next year.

Tank truck operations predominate, but Transpormex also has a thriving refrigerated transport division. Container drayage is another growth area. The company handles both domestic and international shipments, and the burgeoning trade between Mexico and the United States has been a significant factor in the carrier's recent success.

“We've been very aggressive at searching out new opportunities,” says Luis Enrique Hernández, Transpormex chief executive officer. “We're not growing just for the sake of growth, though. We look for rational opportunities that fit our capabilities.

“We are particularly optimistic about our chemical hauling business and our partnership with Superior Carriers Inc. We were already doing some chemical hauling in Mexico, but the relationship with Superior has significantly increased our opportunities. Our chemical business is growing by the month now.

“Our vision is to be the best Mexican specialized land transportation company. To that end, Grupo Transpormex has been certified under the ISO 9001:2000 quality standards. We also have $4 million in liability insurance, which is considerably more than many other specialized Mexican carriers.”

Customers are served by a fleet consisting of 300 tractors, 500 trailers (tanks, dry vans, refrigerated trailers, and container chassis), and 350 straight trucks (propane and fuel oil tanks and dry vans) for domestic operations. Operations are conducted from three terminals — Queretaro City, Queretaro; and Nuevo Laredo and Altamira, Tamaulipas — as well as several staging yards in other parts of Mexico. Sales offices are in Mexico City; Guadalajara; Tula; Puebla, and Manzanillo.

Bulk hauling in general accounts for 75% of the Transpormex operation. It's what gave the trucking company its start 38 years ago. Established in 1966 by Salvador Hernández — Luis Enrique's father — the company began as a propane distributor and transporter in Celaya, Guanajuato.

Within a relatively short time, the company added other liquid bulk cargoes, including fuel oil, other refined petroleum products, and ammonia. For many years, operations were conducted under the names of two separate trucking companies: Translíquidos SA de CV and Transener SA de CV.

By 1991, it made sense to merge the two fleets into a single entity named Grupo Transpormex. “It gave us a chance to become more focused,” Hernández says. “Most importantly, the merger positioned us for more expansion and diversification.”

The creation of Transpormex was part of a major reorganization of all the Hernández family businesses. Today, Transpormex is one of six divisions that constitute parent corporation Grupo Dexel. Converto Dexel, another division, has the Cummins engine consortium in Mexico and also is the exclusive dealer for Volvo construction and mining equipment.

“We've been a Cummins dealer for 17 years, selling primarily replacement engines and parts,” says Xavier Hernández, Converto Dexel director of sales and technical marketing. “We also provide training classes for mechanics at truck dealerships and fleets.”

Not surprisingly, Cummins is the engine of choice for the Transpormex tractor fleet. In fact, the engine preference is one of the few things that remained unchanged since Transpormex came on the scene.

New business

Changes included an aggressive push to attract new business. By 1996, the carrier had begun diversifying into refrigerated cargoes, which now account for close to 25% of the shipments handled by Transpormex. International refrigerated service followed at the end of the year.

“Within Mexico, we recently signed an agreement to be the dedicated carrier for a large new refrigerated and frozen food distribution center in Mexico City,” says Hugo Reyes, Transpormex director general. “We bought 100 new multi-temp reefer trailers just for that account. We're now the third largest refrigerated carrier in Mexico.

“On the international front, we opened small interchange yards in Nuevo Laredo and Reynosa (opposite McAllen, Texas). We currently work with several US carriers, including C R England Inc, Frozen Food Express, and TransX. Refrigerated loads account for close to 80% of our international activity.”

The next big move came in 2003 when Transpormex signed a bulk chemicals interline deal with Superior Carriers Inc. Work also began that year on a new state-of-the-art terminal in Nuevo Laredo.

“We're moving a growing number of loads for Superior, most of them coming into Mexico,” Reyes says. “More than half of the inbound shipments are going to customers in Mexico City, Queretaro City, Apizaco, Guadalajara, Puebla, and Monterrey (Nuevo Leon). The chemical market in Mexico is expanding steadily, and that benefits both Transpormex and Superior.”

Hernandez adds that Transpormex will remain committed to interline partnerships even after the US-Mexico border is opened as called for under the North American Free Trade Agreement. “We have good relationships with our partners, and we have no intention of competing in the US market,” he says. “The only change I can envision right now is that we might move our interline points north and south. For instance, we might set up US transfer points in Houston, Dallas, and San Antonio (Texas). In Mexico, we might have a transfer point in Monterrey.”

Chemical crossings

Currently, international chemical shipments handled by Transpormex and Superior cross at Colombia, Nuevo Leon, or Brownsville (Texas)/Matamoros (Tamaulipas).

Transpormex and Superior both have FAST certification for US Customs preclearance of US-bound shipments, which helps expedite the process. “The FAST process is working well, and most of the time we're not facing lengthy security-related delays,” Reyes says. “We're able to move most shipments across in two to three hours.”

The carriers also work closely with customers and Mexican customs brokers to prevent delays of chemical shipments going into Mexico. Every effort is made to ensure that the border crossing goes as smoothly as possible.

Even with programs such as FAST, border crossings are less efficient than they should be. “Crossings are still slow, and that increases shipping costs for our customers,” Hernandez says. “Many of the problems that cause delays could be easily solved by the US and Mexican governments.”

Once across the border, a southbound chemical shipment takes approximately 24 hours to go from Nuevo Laredo to Mexico City. Transpormex does provide driver teams for some customers. “We also use driver relays for shipments that require extra safety.”

Qualcomm satellite tracking and communication provide an added measure of security. All Transpormex tractors involved in international operations have Qualcomm units. In addition, many drivers carry cellular telephones.

Driver selection

The Transpormex drivers are carefully selected and well trained. “We put a lot of effort into finding the best drivers, and we pay higher wages to those who qualify for hazardous materials hauling,” Hernandez says. “Even with that, we have difficulty finding enough qualified drivers.”

The minimum age at Transpormex for chemical drivers is 25, and the maximum is 45. Applicants must have a valid Mexican federal Class E license for hazardous materials, be able to show five years of over-the-road tractor experience, and provide letters of recommendation. A Class B license is needed for vans and reefers.

Jose Nieto, Transpormex safety/human resources manager, and his team conduct a criminal record check on each driver applicant. Medical exams are done by Dr Guillermo Uribe, the Transpormex doctor. A drug test is part of the medical exam.

Drug retests continue throughout the time a driver works for Transpormex. “We require random and on-highway drug retests for the drivers in our chemical operation,” Reyes says. “Thirty-five to 40 chemical drivers are tested each month.”

Newly hired drivers go though a one-week orientation at the Queretaro terminal before they are put to work. Training includes classroom instruction and hands-on practice with the equipment. Refresher training on hazardous materials is required every two years under Mexican federal rules.

One of the things drivers learn during the new-hire orientation is that late model tractors predominate in the chemical hauling operation. Most of the tractors used for chemicals are less than four years old.

Kenworth T600 conventionals account for 95% of the tractors in the fleet. All of the tractors have Cummins engines. Both ISX (spec'd for 400 to 450 horsepower) and ISM (set for 330 to 370 horsepower) engines are used.

The ISM engine is teamed with an Eaton Fuller 13-speed transmission and the ISX gets an 18-speed gearbox with overdrive. Tractors also are ordered with 13,000-lb capacity steering axles and 46,000-lb drive tandems.

Liberal weight limits

Heavy-duty specifications are a must because the tractors pull big loads. Mexico has some very liberal weight limits, and doubles trains with a gross combination weight of 166,446 pounds are a big part of domestic longhaul operations.

Even when operated singly, Mexican trailers handle higher weights. A 107,000-lb gross combination weight is legal for tandem-axle trailers, and three-axle trailers can operate at 120,000 pounds.

Only trailers built for the Mexican market are used in the doubles trains. Trailers belonging to Transpormex's US partners are operated singly, and gross weights are kept to 80,000 pounds.

Most of the tank trailers in the fleet are TATSA propane transports, and 45,000-liter units predominate. Stainless steel chemical tankers from NACASA hold 36,500 liters, and stainless steel foodgrade tanks have capacities ranging from 22,000 to 27,000 liters. Refined petroleum products are transported in carbon steel tanks ranging in capacity from 25,000 to 44,000 liters.

Pumps aren't used as much on the transport equipment in Mexico. While some of the tank trailers in Transpormex fleet have pumps, none of the tractors do. “Many of our customers have their own pumps, and we provide stationary pumps at some customer delivery sites,” Reyes says.

With its diverse tank fleet, Transpormex has positioned itself for continued growth in bulk cargoes. International shipments certainly will be an important part of it.

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