Tank Truck Firms Report Increase in Demand

This story appears in the Aug. 31 print edition of Transport Topics.

Tank truck carriers, who haul everything from wine to oil field supplies to industrial chemicals, said their business finally seems to be picking up after months of downward recessionary pressure on freight volumes.

“In the last month, we are beginning to pick up both in dry [bulk] and liquid,” said Barbara Windsor, president of Hahn Transportation, New Market, Md. “Business is much better now than in November, December, January and February. We are hoping that what we are seeing is going to continue.”

Using phrases such as “cautious optimism,” executives surveyed by Transport Topics were hopeful that their freight levels have hit bottom.

Carriers are hesitant to say a trend has begun because economic news varies day by day, said John Conley, president of the National Tank Truck Carriers Conference. Conley said he believes his industry is an economic barometer because so many products they haul are used to make other goods.

Windsor said, “It is a slow but steady increase,” including more cement shipments to support commercial construction such as warehouses that was absent earlier in the year.

“We know the freight is running — we haul to truck stops,” said Windsor, who reported a 5% to 7% business increase and noted that competitors also seem to be busier. “We know we are hauling more diesel, but it still trails last summer.”

George Grossardt, vice president and general manager of Schneider National Bulk Carriers, Green Bay, Wis., saw some hopeful signs, too.

“There is some cautious optimism — nothing more than that,” he said. “The economic fundamentals haven’t improved yet. We are not ready to say we are out of the doldrums. We are probably out of the free fall.”

Schneider, which has boosted its chemical hauling capacity more than 20% in the past year to penetrate regional markets, has seen a similar overall increase in volume linked to new business, said Grossardt. Among existing accounts that produce industrial chemicals, business has dropped 20% or more, he said.

From a broader perspective, American Trucking Associations’ monthly activity report released Aug. 14 also showed signs the worst might be over for tank truck carriers.

ATA said tank fleets’ loads dropped more than 25% between June 2008 and June of this year, and rates declined approximately 10% over the period. However, loads during the second quarter were just 1% lower than in the first quarter, that report said.

“People are certainly a little more optimistic than they were a month ago,” Conley said. “There is nothing to say there is a trend yet. The news varies so widely day by day. When confidence becomes more consistent and people start buying things, we [tank truck carriers] will see it first.”

David McCorkle, chairman at McCorkle Truck Line, Oklahoma City, credited highway-related work for part of the improvement.

“Business is slightly better because just this week we have had some highway money coming down,” which has boosted cement-hauling business, McCorkle said. “We may be beginning to stabilize at this point.”

Other shipments such as limestone filler for oil drilling are beginning to stabilize but at levels 30% below last year, as the number of operating oil drilling rigs that are supplied by his company increases, McCorkle said.

Business also has picked up in recent weeks — for different reasons — at Idaho Milk Transport, Burley, Idaho. The company carries juices and wine as well as its namesake product.

“We are seeing a little bit of an increase” as apple and pear juice shipments pick up, said Robert Brice, chief executive officer.

“We always see a spike at this time of the year,” he said, though he added that business is off from last year’s record volumes that were driven by high milk prices and strong demand to haul that staple.

The company also saw a rise earlier this year as wineries tried to move out last year’s products, he added.

Gary Enzor, CEO of Florida-based Quality Distribution, told investors on Aug. 6 that “July trucking revenue has trended about 5% better, but it’s way too early in this economy — it’s too turbulent to call that a trend.”

“Normally we see a seasonal uptick in the second quarter versus the first quarter. We didn’t see that this year,” Enzor said. “We just feel like this economic cycle is extremely difficult to call and compare to past trends.”

The Midwest isn’t seeing any sign of economic improvement, said Butch Bingham, president of Bulkmatic Transport Co., Griffith, Ind.

“Business just is flat,” he said. “We’re a little busier right now — there is always an uptick for agricultural products at this time of year. We are not seeing any green shoots in the economy.”

“There is excess capacity and rate-cutting,” Bingham said. “We have to get capacity out of the industry. I feel it may just now be starting to leave. We are not seeing any of this improvement yet, but I’m hopeful.”