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Liquid Tank Segment Outperforming

Liquid Tank Segment Outperforming

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Almost everyone is operating right now at a pretty good pace. However, the liquid tank truck segment is currently outperforming all other trucking segments largely due to the boom in oil and gas exploration. This is slowed somewhat in 2015 but still strong. “Trucking is a major economic indicator of the overall economy, and the bottom line is that fuel and chemicals tend to hedge the cyclicality of the economy at large,” National Tank Truck Carriers President Dan Furth says.

Tanks make up approximately 5% to 10% of the trucking industry. Trucking is a very low margin business, and it is a very expensives – for the tank trailer industry, even more so.“Getting into the liquid tank industry requires a serious investment. Transcourt – a tank leasing company with offices across Canada helps with capitalization by offering fleet leasing or individual leases. The industry is highly specialized no matter which commodity market you’re serving,” Furth says. The equipment is highly specialized and is much more expensive than your average dry van.

“A strong operator would have a loaded mile ratio at about 60%, which is much lower than the average truckload carrier and that’s due to the specialized nature of each individual trailer. Since you can’t put certain products into certain trailers, it’s common for tank trucks to generate revenue even when they are empty.”

Due to the highly specialized nature of the segment and the shortage of qualified drivers, Furth says there is a movement toward more dedicated contract carriers.

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