Tank Truck, Flatbed Carriers Gain as Oil and Gas Exploration Grows

Many tank truck and flatbed carriers are enjoying strong growth by tapping into the booming oil and natural-gas exploration business, industry experts said.

“Exploration is great for the tank truck industry because it increases demand for our services,” said John Conley, president of the National Tank Truck Carriers. “From a business standpoint, it is positive. An awful lot of people are looking at these opportunities.”

Officials link exploration-related shipments with a 16% gain in tank truck loads through July from a year earlier, according to data from American Trucking Associations. That figure far outpaces industrywide truckload growth of 3.1% over the same period.

ATA does not compile precise statistics on oil and shale gas exploration. However, Andrew Browning, a partner at energy industry con-sulting firm HBW Resources, said a single gas well can generate more than 9,000 truckloads, hauling water, sand, drilling equipment and materials.

Oil and gas drilling is up 17% this year, according to oil-field services company Baker Hughes Inc., which posts weekly rig counts on its website.

“There are a lot of opportunities for truckers,” Browning told Transport Topics, as hydraulic fracturing, or “fracking,” uses water and sand to extract shale gas.

Among the fleets capitalizing on that growth are flatbed fleet PGT Trucking and tank carriers Quality Distribution Inc. and Bulkmatic Transport Co.

“PGT has witnessed a substantial increase in flatbed shipments,” said Chad Marsilio, project manager for the Monaca, Pa.-based carrier that moves pipe, casings and other drilling materials.

“This has created unending opportunities for us,” including 30% growth in sand shipments in 2011, said Pete Miller, Bulkmatic’s assistant vice president of sales.

Another attraction of exploration-related trucking is return on investment that is at least double other types of tank trucking, Quality CEO Gary Enzor said at an investor conference last month.

“There is a tremendous opportunity, if you look in general, at the transportation of energy-based products,” said Chris Broussard, president of Oilfield Trucking Solutions, a subsidiary of Chesapeake Energy Corp., Oklahoma City, the nation’s second-largest natural-gas producer.

Broussard linked the exploration surge in Pennsylvania, Texas, Oklahoma, North Dakota and Louisiana to the rebound in oil prices from the low of about $33 a barrel in early 2009.

Broussard, Enzor and Miller all highlighted a growth-related difficulty.

“The driver situation is very, very critical,” Miller said. “The service companies are asking, ‘When can you get us more drivers?’ ’’

“There is a severe shortage of drivers,” Broussard said. “We are trying to recruit from other industries and other facets of trucking. I don’t think the van industry is enjoying the freight levels of the past.”

In fact, loads in all types of tank trucks were 46% higher this July than in 2000, according to ATA, while dry van loads have fallen 10%.

“Drivers [in the energy area] can make significantly more money and they are home every day,” Broussard said. “You capitalize on those assets in your recruiting.”

“We’ve seen people solve their [driver] problem differently,” said Enzor, citing a potential acquisition whose drivers are paid a higher than normal percentage of revenue.

“You’ve got to balance the economics,” he said. “If you don’t do that, you have to provide housing and make some special accommodations.”

Enzor said that Eagleford, a shale gas area in Texas, is not that difficult because the weather is good and it is pretty smooth topography.

While Texas topography isn’t an issue, it is a concern in Pennsylvania’s Marcellus shale zone.

“Trucking in the energy industry is very difficult,” Miller said. “Many of the roads are steep, old logging roads. There is a lot of hurry up and wait. Drivers have to patient and safety conscious.”

Still more truckers are poised to diversify.

Exploration has “provided some new opportunities for expansion,” said Randy Schaffer, project manager for flatbed carrier Klapec Trucking Co., Oil City, Pa., which acquired containers to carry waste from shale gas wells.

“We view it as an alternative to the normal course of trucking,” Schaffer said. “It is nice for the diversity of business. When opportunities present themselves, you have to make a decision about whether you want to go along or not.”

“Oil and gas exploration certainly is a good thing for the trucking industry,” said Rich Moskowitz, regulatory affairs counsel for American Trucking Associations. “There is a new source of demand for freight services, which is likely to be significant.”

“We do see this as a continuing opportunity,” added Marsilio, whose company added 30 drivers in the Marcellus and expanded to Texas and other states.

Marsilio said he’s optimistic because major oil companies have bought Marcellus acreage, a sign of commitment to develop clean domestic energy.