ISOs make US gains: As seen in Hazardous Cargo Bulletin

  • Posted Oct 16, 2004

SOs make US gainas

US Domestic use of tank containers in the US has lagged behind other markets, largely due to the broad availability of rail transport. Things are beginning to change, however, if VTC’s experience is anything to go by
Ventura Transfer Company (VTC), the California-headquartered bulk handling and transportation company, has launched an educational marketing campaign promoting tank container haulage in the US domestic market after it was called in to quickly design an intermodal logistics solution for one of its customers in the wake of a sudden reactor shutdown. VTC says the US domestic shipping market’s recognition of the advantages of tank container hauliage is on the rise, and several railways have formed policies aimed at boosting the use of tank containers.

When the chemical company’s reactor unexpectedly shutdown, the company was forced to supply its western US customers with product produced from its other facilities. Its challenge was to do so seamlessly and with minimal inconvenience to its customers, despite the fact that product had to be shipped across the country. The company in the past had relied on long-haul trucking to reroute supplies, but was finding in the face of the recent shutdown that the cost and viability of this solution was prohibitive. According to VTC, driver shortages in the US and, in some cases, a lack of possible return loads, exacerbates problems associated with direct trucking.

VTC helped the company devise an ISO tank-centred plan that moved the product by rail from the east coast to the west coast, and VTC says the deliveries were made as quickly as they would have been by way of direct trucking yet at a more competitive price. The Long Beach, California-headquartered VTC owns and operates nine railcar transfer terminals in California and Arizona, has two warehouse locations in the Los Angeles area and operates a full-service ISO container depot.

Reality bites
“Reality is that a reactor shutdown, turnaround, outage or malfunction is inevitable, and being prepared is necessary to continue deliveries to customers seamlessly,” explains Galen Clifford, VTC’s vice-president of marketing and sales. “In the case of this shipper, it had been sending direct trucks in the past, but found during this shutdown that sending trucks from the east coast of the US to the west coast was horrifically expensive. In addition, it is very hard even to find trucks on the highway currently with such a severe shortage of drivers. The company was also finding that there was no cargo that the west coast produces that would allow that carrier to fill his truck and go back east to help minimise the round trip cost. So they were paying, essentially, round-trip rates to supply those companies out here on the west coast.”

VTC says that the company’s experience during its shutdown is one of many signs it is seeing that the US market is increasingly recognizing the importance of domestic tank container transport. It is this recognition buy ativan online cheap that VTC hopes to accelerate through its new educational marketing push.
“This is a market that we have been watching for several years,” says Clifford. “I do think that this last year ˆ with the US economy roaring back, the degree of imports and exports taking place, and the chemical companies become more global in their production ˆ has been the beginning of a period when the value of the use of ISOtainers, not only for international shipments, but for domestic movements, is finally dawning on a lot of the chemical makers and suppliers. I think these companies are seeing that ISO container transport certainly offers some options that direct trucks and long-haul trucks don’t, especially when there’s such a shortage of drivers and equipment right now. In addition, ISO tanks are increasingly being constructed to be lighter, so the payload can move up to be comparable to full tank truck shipments.”

Railing for change
Another factor Clifford sees as contributing to an upswing in tank container use is that US railroads have begun to recognize the economic benefits they could reap from increased tank container traffic. Thus in an effort to encourage ISO tank haulage over the use of trucks, several railroads have introduced pricing structures aimed at making tank container use more attractive. In addition, both Union Pacific (UP) and Burlington Northern Santa Fe (BNSF) railroads have instituted internal marketing programmes intended to entice domestic chemical companies to use ISO container shipping. UP offers chemical companies the use of its own fleet of containers under its Bulktainer programme. BNSF does not supply containers, but offers a public pricing model, which VTC says allows smaller ISO tank operators to enter the tendering process.
“They have put across some pretty aggressive rail rates over the past year to solicit and induce domestic chemical companies to use ISOtainers,” says Clifford. “We have worked in the past with BNSF’s programme as well as UP’s.”

The changing face of the import/export market, Clifford says, is also lending momentum to tank container transport within the US. As an example, he points to a recent contract VTC netted with a US-based third-party supplier who is buying maleic anhydride from Korea. Maleic anhydride is primarily used in the formation of resins for use in piping, vehicles and electrical goods. US production of maleic anhydride until recently had been sufficient to meet domestic demand, but because the US economy has strengthened and because certain applications for maleic anhydride within the US have been expanding, demand has outgrown domestic supply, price has moved upward accordingly and a new US market has been opened for offshore suppliers like VTC’s in Korea, which now find themselves in price-competitive positions. Under VTC’s arrangement with the company, VTC will handle the import and distribution of the product which will be shipped in ISO containers.

“This is another perfect example of how ISOtainers are making inroads into US domestic transport,” says Clifford.