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UTTC Builds, Strengthens Position In Worldwide Tank Container Sector

IT'S BEEN well over a year now since Rentokil Initial made a hostile buyout of BET Plc, parent company of United Transport Tankcontainers (UTTC). In that time, UTTC has shown that it does indeed have a place in the Rentokil Initial system.

A number of changes were made over the past year to strengthen the operations of UTTC, which is based in Thame, Oxfordshire, United Kingdom. Among other things, UTTC has been combined with United IFF, a specialist in container movements of powders and pellets, and United Rouch, a general intermodal cargo business based in France.

"Rentokil Initial saw that UTTC had built a solid niche and was positioned for sustained growth," says Bruce Hutchinson, UTTC engineering director. "We have a lean management team that is performing well. We are growing globally, something that was very attractive to our new parent company.

"The intermodal operations that were recently combined with UTTC give us a broader capability. We believe it will help make us even more attractive to our customers. In particular, United IFF already serves many of the same customers as UTTC, and these include BASF, ICI, and British Petroleum."

UTTC was established almost nine years ago as a division of United Transport, one of the largest UK tank truck carriers at the time. UTTC is a sister company of DSI Transports Inc in Houston, Texas.

The tank container operator focuses on chemicals, serving some of the largest manufacturers in the business. "We handle a wide range of gases and liquids, with chemicals being a mainstay," Hutchinson says. "Foods make up a very small part of our business."

UTTC has built a strong reputation for quality among chemical shippers. The company has ISO 9002 certification and was the first UK tank container operator to receive SQAS certification.

SQAS stands for Safety and Quality Assessment System and was developed by the European Chemical Industry Council (CEFIC). SQAS certification is now mandatory in Europe. Audits are carried out by independent inspectors who assign a percentage grade. The intent is for a standardized audit to replace individual assessment programs that many European chemical companies had in place.

Intermodal is the most recent area covered by the SQAS program, and it was implemented in 1997. Other assessment packages cover marine shipping, bulk storage terminals, tank cleaning operators, inland waterways, and highway transport. In meeting the needs of chemical shippers, UTTC has built a 3,100-tank-container fleet that is operating worldwide.

"We've come a long way from our start as a short-sea operator with 400 tank containers and a European focus," Hutchinson says. "Europe is a mature market today, and we are working aggressively to build market share in North and South America and Asia."

European Activity Europe still accounts for 45% of the container operator's activity. The Americas generate another 30% to 35%, and Asia makes up the balance.

While North America, with its large chemical industry, offers attractive volumes of business to tank container operators, it also poses difficulties in the form of trade imbalances. More chemical freight moves eastbound from the United States to Europe.

Equipment repositioning can be a real challenge, because chemical companies have pushed rates so low that empty repositioning cannot be justified in many instances. UTTC has addressed the problem by leasing tank containers in the United States from Transamerica Leasing.

UTTC is still developing the Asian market, but the potential there is huge. "We see great potential for the Far East," Hutchinson says. "That's where the sustained growth will come from. The tonnage of chemicals moving through the region is phenomenal, and we are seeing a steady shift from drums to tank containers."

Branch Offices The UTTC operation is managed from 10 offices in eight countries: United Kingdom, Holland, France, Germany, Sweden, United States, Brazil, and Singapore. In addition, the company has a network of agents throughout the Middle East and Asia. Chinese representatives recently were appointed in Dalian, Tianjin, Qingdao, and Shanghai.

Each UTTC regional office is responsible for directing tank container movements in its area. A key objective is to ensure that tank containers don't sit long between loads.

"We want to keep equipment moving," Hutchinson says. "We are an operator, and we don't want our fleet to become static. We try to limit the amount of time a tank is used for storage. We look very closely at such requests.

"Our best utilization is in Europe, where containers can handle up to a load a week. We average a movement a month for tank containers traveling between Europe and the United States. Transit by containership generally takes three weeks."

Computer Network The UTTC offices communicate with each other and with the various agents by computer and by telephone. Software for the computer system was developed in-house and has evolved over the years. The single-entry system provides detailed data on day-to-day operations, with exception reports and trends highlighted.

UTTC programmers have added Internet capabilities to the system, which is expected to improve communications with the various depots used by the tank container operator. The Internet system should be fully in place by the end of 1998.

"We're maintaining daily communication over the Internet with some depots," Hutchinson says. "Tank surveys are being submitted over the Internet, and the reports can even include photographs. Many of the depots in Europe and the United States have digital cameras.

"Most of our depots have Internet access. Our biggest concern is the amount of information that is likely to be moved over the Internet. We want to make sure we can handle the volume before all depots are brought on-line.

"We don't know at this time whether the Internet will replace EDI (electronic data interchange). EDI seems to be much less convenient than the Internet, which is a free-standing system. Dedicated equipment is not required for the Internet."

Depot Partners UTTC works with about 30 depots worldwide. Depot operators used in the United States include Dana Container, CBSL Transportation Services, CMS Intermodal Services, and Specialized Tank Services. Surveys are performed by SGS-Tank & Container Services and Silver/CIMS Inspection.

Depots are provided with UTTC's safe operating condition manual, which contains a 47-point inspection checklist. Containers receive a full evaluation every time they pass through a depot.

Container appearance receives a lot of attention during the inspections. "Our customers are image conscious today, and that concern seems likely to strengthen in coming years," Hutchinson says. "We're going to face more regulations and requirements in the future. We believe we can avoid problems if our containers look good."

To start with, UTTC buys and leases equipment built by some of the best-known manufacturers in the business. Primary builders are Welfit Oddy (Pty) Ltd in South Africa, Van Hool NV in Belgium, Universal Bulk Handling in the UK, and CPV Limited in Ireland.

"We focus on builders that can meet set schedules because we typically order 200 tanks at a time," Hutchinson says. "We want to keep our fleet as modern as possible."

In 1997, UTTC purchased approximately 400 new tanks, a mixture of standard IMO-1 containers, swap tanks, and specialized units. The leased portion of the fleet also grew. A significant percentage of the tank containers in the fleet are leased. Hutchinson says leasing makes good business sense for a tank container operator because fleet size can be adjusted quickly to address traffic imbalances. UTTC leases tanks from Transamerica, Sea Containers, and Eurotainer.

Standard Tank The primary tank container in the fleet is the IMO-1, although the company also operates IMO-5 gas tanks and various specialized units. Swap tanks are similar to the standard 20-ft ISO containers, but they have a 30-ft length and are generally limited to the European market.

Tanks in the UTTC fleet have capacities ranging from 15,000 to 31,000 liters (4,000 to 8,200 gallons). Typical IMO-1 tanks are jacketed and insulated with up to 100 mm (four inches) of fiberglass and polyurethane foam. The tanks have steam heat and are set up for bottom discharge of product. UTTC prefers IMO-1 tank containers with full frames.

"We want the extra protection afforded by the frame," Hutchinson says. "Manufacturers have done a good job of designing frame tanks with tare weights that are roughly equal to beam tanks (which have no longitudinal frame members on top, and often on the bottom as well)."

Every effort is made to keep the tank containers in top condition. "We refurbish our own tanks when they begin looking tired," Hutchinson says. "Among other things, we want to keep the valves and other hardware up to date."

UTTC refurbishes approximately 25 tanks a year at its maintenance depot in Stockton-On-Tees, Cleveland, United Kingdom. Refurbishing takes about three weeks, during which time all damage is repaired and the frame is shotblasted and repainted. Valves and vents are replaced as needed.

Image plays a role in the selection of the trucking companies that provide drayage for UTTC. Key trucking partners are United Transport in the United Kingdom and Europe and DSI Transports Inc in the United States. A number of carriers are used in other parts of the world.

UTTC works with its various carrier partners to ensure that the tank containers are handled properly and safely. The tank container operator has been working with trucking companies to encourage a proactive approach toward safety. UTTC managers monitor trucking company safety performance monthly.

Attention to such details has helped build UTTC into a global competitor and is making it possible for the company to thrive under a wide range of operating conditions. Managers leave no doubt that the company is here to stay.

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