Carrier of Choice
With a history stretching back to the 1950s, Modern Transportation has earned its reputation as a carrier of choice. The Pennsylvania-based business cut its teeth on dry bulk jobs, expanding the company to include two dozen terminals and a fleet of trucks that traverse more than 30 states.
Five years ago, the team made a dramatic shift. After decades of specializing in the dry bulk market, the company plunged into the liquid chemical market – maintaining its market leadership in the former while quickly becoming a contender in the latter.
The decision to take on the liquid chemical market was an obvious choice for a company that strives to be the best. After dominating the dry bulk market, Modern Transportation chose to move into an entirely new area to continue reaching its full potential. “They had reached the maximum level as far as being an industry leader,” explains Vice President of Sales Randy Sheeler. The team wanted to continue as market leaders in the dry bulk market, but they also realized that their level of commitment to safety and efficiency was an ideal fit for the more complex chemical market. “They thought it was a great avenue to pursue. It meant competing with a more elite base of carriers and competition, ones that have great risk management programs that are handling some of the most deadly chemicals in the country. The company knew that it would be a challenge. However, with the right people, they felt the provisions and guidelines they had in place would work very well on the chemical side.”
As they ventured into the new market, one of the first steps Modern took was to hire Mr. Sheeler. “In light of my 25 years of bulk chemical success, Modern sought me out to accelerate the plan for that market. Today, we’re moving quickly, yet tactically.” After bringing his network and expertise with him, Mr. Sheeler has successfully led Modern Transportation into an exciting new arena.
The new specialization is not an easy one to master, of course. “The challenge from a trucking standpoint is you’ve got to step up to the plate with more insurance coverage and significantly more safety training,” Mr. Sheeler explains. “There is a huge difference in hauling a load of sand versus hauling methylene chloride, a substance that can actually kill you. So as you can imagine the truck driver has to do a lot more than drive from point A to point B. They must be trained to properly handle chemicals.”
Upon Mr. Sheeler’s arrival, the next step was to get Modern Transportation properly certified and up to speed with all chemical-related safety regulations. “On my first day at Modern, we began pursuing certification in American Chemistry Council’s Responsible Care program,” Mr. Sheeler recalls. “The Responsible Care program is the only formalized auditing process that chemical companies use to audit tank truck companies. It’s an extremely intense, very in-depth auditing practice of all safety requirements and all SOPs.” Earning that recognition is crucial. “Responsible Care was one of the only ways we could get on the radar of some of the larger chemical companies. That [certification] basically says that we are amongst the elite.”
Hiring experienced staff also helps ensure that chemical safety standards are met. “We are aggressively pursuing and hiring the right people with the right experience out in the field, [people] who have vast chemical transportation experience.” Utilizing new and advanced equipment is also crucial to the company’s safety efforts. “We’re a very technological-based company,” says Mr. Sheeler. “We put all of the bells and whistles that you can on these tractors.” For example, Modern Transportation has installed computer systems in all of its trucks to manage the driver’s speed and communications. “We govern every truck and constantly check their miles per gallon to assure we are achieving the best efficiency.
“Not only do we regulate truck speed, but dispatches are also transmitted directly to the tractor’s computer. As such, there’s no need for a driver to be on a cell phone or looking at a computer while driving. When their truck is powered down, our driver pulls up their dispatch and simply reads what is required for the load. This technology enhances our safety, as well as our efficiency.”
Modern is always in pursuit of the best cutting-edge technology, particularly if it serves to protect the environment. “We’re constantly seeking and testing innovative methods to enhance our fuel mileage and lower emissions,” Mr. Sheeler reports. One such innovative effort that continues to pay dividends for Modern and the environment is their commitment to Compressed Natural Gas. Currently, 12% of the Modern fleet runs on CNG, with plans to continually introduce new CNG tractors as units are retired.
The liquid chemical market is already providing a lucrative and steady business for Modern Transportation. This success is due to the company’s superior reputation, as well as to the ubiquitous nature of the product. “Chemicals are present in nearly every product that we use, from makeup, to the cars that we drive, to the houses we build,” Mr. Sheeler points out. Modern has a narrow focus within the cosmetic, automotive, and construction industries, zeroing in on certain types of liquid chemicals. “We specialize in very niche chemicals, what are called ‘batch made’. These chemicals are made for a specific client, not mass-produced.”
In fact, many of the clients utilizing these chemicals already work with Modern Transportation on the dry bulk side. Adding liquid chemicals to the company’s repertoire “will not only allow us to expand our customer base, but will also help our existing customers. Many of them take raw inbound materials in liquid format, manufacture their product, and then ship it as a dry product. That design allows us to perform the inbound transportation as well as the outbound transportation.”
Maintaining these client relationships is important to the team and Modern plans to keep a narrow, client-centered focus moving forward. “We are not trying to be all things to all people. Our strategy is to enter into various chemical markets, yet limit our growth in any one facility to not more than 30 trucks,” Mr. Sheeler explains. “[We will] choose about four to five customers and commit all of our capacity to those four or five. That way, we’re not going into a market and overselling ourselves. Our sales strategy is very specific; we are choosing who we want to do business with.”
In addition to the unique challenges of the liquid chemical market, Modern Transportation faces some basic challenges that are intrinsic to the industry. A lack of drivers is one of the biggest. Mr. Sheeler estimates that the industry is short “about 200,000 drivers. So the fear is, once this last wave of baby boomers retires from driving trucks, there just aren’t enough younger people that want to drive a tractor-trailer.”
In order to be more attractive to young people, Modern Transportation is trying to slash the amount of time that drivers have to be away from home. “We are working to reduce the length of haul, so the truck driver who is out for three or four weeks at a time is really the minority.” Creating more operating bases is key. “Our ideal design is to base ourselves right at the chemical plant, so the average length of haul will have our drivers home almost every night.”
Resulting from the workforce shortage, retention is crucial. Modern strives to be a top-notch employer in order to maintain top-notch talent. “We are pursuing the top gun of drivers and we want to pay those drivers above industry standards. That will enable us to focus upon retention and not significant turnover.” The strategy is working; Modern Transportation boasts a 50% retention rate – nearly twice the industry standard. “One thing we are very proud of is that our turnover is just above 50%, while the industry [turnover rate] is almost at 100%. We are retaining half the drivers that we hire – which is not a great number compared to some other industries, but it is a phenomenal number for the trucking industry.”
With a strong presence in the dry bulk and liquid chemical markets, a strong safety record, and dedicated drivers, Modern Transportation has become a carrier of choice across multiple industries. And the team is just getting started. “Our goal is to double the size of the company over the next five years and we will do that through acquisition and through organic growth. Our goal is to have five new terminals over the next three years in some of the major chemical markets within the country.” After successfully jumping into the liquid chemical industry over the last five years, while still maintaining its dry bulk leadership, the company is well on its way to meeting these goals.