Tactical transformation: Reformulated carrier rises with driver pay

Dec. 9, 2022
ASC emerges as ‘Premium’ bulk specialist in Canada with people-first approach, revenue-boosting new direction

Truck driver salaries in the U.S. are soaring across all segments, and tank truckers are reaping the rewards, collecting at least $10,000 more per year now than in 2021 in every category, including per-mile, per-hour, and percentage, according to Cottingham & Butler’s 2022 bulk/tank trucking benchmark report on compensation and benefits.

Glen Parsons is spurring the same shift north of the border.

The owner and president of Alchemist Specialty Carriers (ASC) and Bulk Specialty, Inc. (BSI), both based in Langley, British Columbia, Canada, says he has increased driver wages by more than 40% in the last two years, to where on-highway drivers now make up to $39 per hour—and yet it didn’t help him recruit more drivers.

That’s OK, says operations manager Madison Barry. That wasn’t the goal anyway.

Their real objective was to raise the bar for all Vancouver-area drivers, and the plan is working wonderfully, they insisted. ASC drivers received their third pay raise in the last two years in August, and each time they boosted compensation, their competitors were close behind. “So even though we hoped to benefit more, we’re happy to see the plan is working, and industry wages are going up,” Barry said. “And our customers have been super accommodating with rate increases, knowing they’re going directly to the driver.”

Still, ASC is benefiting, too. By improving pay and benefits, cultivating a people-first culture, and revamping operations, ASC recently earned Premium Carrier certification in British Columbia, and secured Trucking HR Canada’s Top Fleet Employer status for the fourth straight year—elite designations that helped boost referrals and applications. As a result, the company is on track to grow annual revenue by 25% this year.

Now the bulk hauler’s greatest constraint isn’t the driver shortage that topped the American Transportation Research Institute’s Top Industry Issues for five straight years, or fuel prices, which supplanted it in 2022. Like a growing number of fleets operating in a disrupted, post-pandemic world, their issue is finding trucks and trailers.

“We could be doing more right now,” Parsons said. “We just don’t have the equipment.”

New direction

ASC was highly leveraged and hemorrhaging money every month when he purchased it from refrigerated carrier Coastal Pacific Xpress (CPX) in 2015, Parsons said. Now he expects to pull in $15 million in revenue with 39 company drivers and owner-operators this year after reaching $12 million in 2021. And BSI, which he and two partners started in 2019 after purchasing the 15-acre Langley property from Trimac Transportation, is on pace for $6.5 million.

ASC primarily hauled hazardous waste in roll-off bins under CPX ownership. It still moves hazardous waste but only in tankers for a competitive edge. And once it was established as a bulk fleet, customer requests started pouring in, Parsons said, and expanded into chemicals like caustic soda, hydrochloric acid, and liquid silicate. “It’s not a cheap transition, because you’ve got to buy tanks, trucks that are properly spec’d, and everything else,” said John Badgley, director of strategy and operations. “But it was an easy move, and demand is high.”

Parsons created BSI because the Langley property came with rail access. That business propelled the team into fuel hauling and blending, and transloading. Both companies now handle chemicals and fuels, including gasoline, diesel, jet fuel, and ethanol, and serve some of the region’s largest companies as an all-inclusive provider of bulk transportation and logistics. “With the shortage of drivers and trucks out there, companies are looking for someone who can take all that off their plate, so they don’t have to deal with it,” Parsons said.

With Canada’s new Clean Fuel Regulations requiring fuel suppliers to increase ethanol blend percentages to reduce carbon intensity, Badgley expects to soon go from 80 tank carloads of ethanol each month to 120, increasing blending activity, and truckloads of blended fuels to retailers and ethanol to refineries. And while a newly unsegmented approach is cinching customers’ confidence, the team’s people-first perspective is swaying drivers. “One of our sayings is ‘Our people come first, our customers come second, and our profits come third,’” Parsons said. “So we make sure everyone stays engaged and enjoys what they do, and has a work-life balance, the ability to help direct the business, and is well-compensated for their efforts.”

Driver friendly

ASC was one of the first companies in BC to switch highway drivers from mileage to hourly compensation to help eliminate unpaid downtime. “We want to make sure our drivers are getting paid for every hour they are performing their duties,” Parsons said. In-town drivers already were paid by the hour. By paying all drivers the same, they also made it easier for them to understand the choices. “Drivers kept coming in saying they wanted to work in town because they could make more money,” Parsons explained. “So we’d have to go through their pay, and show them they were actually better off on highway runs, because there was no correlation.”

Now highway runs start at $38 per hour, in-town runs at $35 per hour, and drivers can weigh their options clearly. “We wanted our pay to reward highway drivers, so they could see that increase, for them and their families, because being away from home is a sacrifice,” Barry said. The change also motivated more drivers to take highway jobs, Badgley pointed out. “We had a hard time hiring highway drivers in the past,” added Amrit Mahil, safety and compliance manager. “So we’re making the benefit of taking the highway option more visible.”

ASC created a new option in the process: Hybrid driving.

“For the first time in my five years here, we have in-town drivers asking to do out-of-town work as well,” Barry said. “So now we have drivers who do both.”

ASC uses Samsara ELDs to verify drivers are paid for every hour they work. The company also streamlined pay for all vehicle configurations. Previously, drivers who pulled super-B tank trailers made more than those towing tandems. Drivers can earn an extra $1 per hour in quarterly performance bonuses worth up to $3,000 annually. Payouts are based on points tied to safety performance, and customer and dispatcher feedback. Mahil said 90% of drivers earn the full bonus. “The system helped us reduce speeding and hard braking,” Parsons said. “We haven’t had an at-fault accidents in more than two years.” The company also installed front- and side-facing Samsara cameras to support drivers. “If we had issues on the road, the driver usually was blamed,” Mahil said. “Now we’re able to prove the driver wasn’t at fault, saving us from potential insurance claims.”

Further employee-friendly benefits include a new registered retirement savings plan (RRSP) with a company matching program, premiums for night work, a monthly employee BBQ with management and owners, and newsletters that keep drivers’ families updated. ASC also prides itself on maintaining an open environment in dispatch to promote driver inclusion. “We want drivers to know they’re part of the company, their opinions are heard, and they’re the ones helping us grow.”

The result: A 3% turnover rate last year. ASC was at 70% when he acquired it, Parsons said.

Equipment constraints

ASC previously leased trucks from Ryder, which provided service from an on-site shop, helping it curb maintenance costs. Then Ryder exited the “captive-shop” business, leaving ASC scrambling to establish a steady source of new power units amid persistent production disruptions. “We’ve had a hard time finding our niche with manufacturers because not everybody has trucks,” Parsons said. “So we’re buying from Kenworth, we’re buying from Mack and Freightliner—we’re buying trucks from anybody who has them just to backfill growth. But we’d prefer to have supplier partners who consistently meet our needs, so we can continue growing.”

Fortunately, Parsons was able to enlist a new vendor he trusted, SKR Truck and Trailer, to operate the on-site shop. ASC is No. 1 on SKR’s customer list, but it stays busy with outside work. “We’re specialists at finding and managing drivers, and we didn’t want to get bogged down on the maintenance side,” Parsons said.

ASC’s fleet currently includes 39 trucks and 103 tank trailers.

The company received seven long-awaited 2022 Mack trucks in October, Parsons said. He already ordered 10 more, but he’s not expecting them before next spring. ASC also has 10 new Tremcar super-B fuel tankers ordered for next spring, and Parsons was hoping to receive two new stainless Tremcar triaxles in October. ASC recently turned to Tremcar as its primary trailer supplier in hopes of standardizing its fleet, and securing more consistent delivery times after struggling to take delivery of competing brands, which also are now more expensive due to rising shipping costs and duties. “Equipment capacity is brutal right now,” Parsons said. “Everybody’s fighting the same battle to find enough to do the job.

“Despite the challenges, we have come a long way in seven years—and I look forward to continuing to work with all the great people who’ve contributed to our success.”