Assessing the Benefits of a Dedicated Private Fleet: Insights from the Tank Truck Marketing Analysis
It’s been a challenge for the tank truck industry to estimate and measure the overall impact this important transportation system has on the nation. In late 2015, the National Tank Truck Carriers, Inc. (NTTC) announced the availability of its Tank Truck Industry Market Analysis publication. This document highlights the results of an inaugural study which took a systematic approach to calculate the amount and types of freight moved by tank trucks.
The study found that in 2013, the tank truck industry operated 163,670 tractors, or 10.9% of the roughly 1.5 million over-the-road tractors in the U.S. This is no small feat considering the unique needs of the tank truck industry including specialized equipment, highly trained drivers and a relentless effort to stay within safety regulations.
Industries that utilize tank trucks – chemical manufacturing, agriculture and gas and oil transportation, to name a few – are continuing to grow, increasing the need for tank truck fleets and drivers. What choices are available for large industries? How do these businesses determine the best use of their logistics resources and meet the needs of their customers?
Private or Dedicated Fleet Transportation
One key finding in the NTTC Tank Truck Marketing Analysis stated that in 2013, private fleets operated 44,729 tractors or 27.3% of all tank truck tractors. When businesses take on the operational responsibility of having their own private fleet, there are significant items to consider:
- Increases in cost related to capital invested in trucks, tanks and safety equipment.
- Hiring, training and managing highly specialized drivers.
- Overseeing and staying up-to-date on the safety requirements associated with moving potentially dangerous, hazardous materials over the road.
- Managing regulatory requirements including essential driver training (EDT), speed limiters and the National Drug Test Registry.
Many times large manufacturers are hesitant to employ for-hire drivers to transport their specialized chemical or petroleum product. Their specific handling requirement, specialized equipment and overall knowledge of the product cannot be simply communicated and trusted through the for-hire transportation process.
A dedicated fleet transportation option offers many benefits:
- Consistent on-time delivery
- Tank trucks and drivers that match capacity needs
- Increased control for the manufacturer
- Reduced transportation costs.
When you work with a logistics partner that specializes in tank truck transportation, they are able to provide professional, highly trained drivers that are trained specifically to meet the customers’ needs; experts in the safety requirements and regulations that are critical when working with dangerous cargo; a fully-engineered solution to get your product to its destination safely, on-time, as expected. Businesses can focus resources on what they do best, knowing the logistics experts are handling transportation needs.
It’s important for businesses to assess their logistics needs and work with a logistics partner that can develop a complete solution, allowing you to focus your resources on what you do best.
Meeting Carrier Demands
In 2013, private fleets operated 1,850 tank trucks (22%) to transport cryogenics.
Continual growth in energy production in the United States means additional need for cryogenic transportation. More than 35 million tons of cryogenics are transported by private fleet yearly, according to 2013 analysis.
Cryogenic transportation includes the movement of industrial gases such as nitrogen, oxygen, argon, carbon dioxide, and helium; and liquefied natural gas (LNG). These gases are used in products that include everything from health care to food processing to the computer and automotive industry.
To effectively meet demand for this growing industry, logistics partners need to be creative with their transportation needs. Working with a logistics company that has experience in safely transporting hazardous materials can meet this demand.
Dupré recently worked closely with a large chemical distribution company to reduce administrative costs associated with operating their own fleet, freeing up the reallocation of capital resources for their core business. Dupré designed a supply chain solution that included the ability to manage the distribution from regional hubs into the customer’s local branches and the reverse logistics involved in safely collecting and transporting hazardous waste from branch facilities back to regional hubs for disposal. The distribution pattern also provided backhaul opportunities, which created gain share revenue for the customer to offset empty miles where applicable. Finally, management positioned at the customer’s primary distribution operation would oversee the daily activity and drive efficiency into the multi-state supply chain.
The results of this partnership have been very positive. The customer was able to eliminate the administrative tasks involved with managing a private fleet, and reallocate resources to focus on growth. Since inception, the transition has been seamless and the customer’s ability to focus on their core business has driven growth at an annualized rate of 15%.
In fact, most of Dupre’s dedicated fleet customers experience cost savings while reaping the benefits of improved service through dedicated personnel and resources.
The NTTC’s Tank Truck Marketing Analysis provides vital information for businesses and logistics providers that work closely with tank truck carriers. Establishing a solid partnership with a reputable logistics partner and working to assess capacity needs, review tank truck carrier options and engineer an efficient logistics solution is critical for business’ to keep up with growing demand and increased competition.