Blog April 24, 2019

Why tank operators are finding it’s nice to be niche

By Nicola Byers

The tank container industry has often been described using terms such as “niche”, “specialised” or “boutique”.  But that niche has done well – tank operators have seen years of slow and steady growth as more shippers in the chemical, food processing and gas sectors have recognised the key values that this form of intermodal transport provide: flexibility, environmental sustainability and safety.

While the industry is unlikely ever to make the leap from niche to mass market, is it now ready to move to the next level? The 2019 ITCO Global Tank Container Survey provides some positive signs – 10.8% growth in 2018 (compared with 8.66% in 2017), a fleet that has grown to reach 604,700 and annual production rising to 59,700 units last year (compared with 48,500 in 2017).

Recent announcements from some of the key tank container operators back up those impressive headline numbers. For example, Stolt Tank Containers (the largest operator according to ITCO’s Survey) has added 1,000 leased units to its fleet in Q3 2018. Initiatives by tank operators have focused around two key factors that driving growth in the industry – expansion into new markets and technological innovation.

Building a global niche

Growth in China underpins the current positive outlook, with increasing use of tank containers for domestic transport of bulk liquids. Swiss company Bertschi picked out China when highlighting its growth in South America and Asia, as well as the doubling of storage and filing capacity at its chemical terminal in Singapore for distribution to the fast-developing economies of south-east Asia. In January this year, Van Den Bosch delivered its first tank containers to the port of Karachi in Pakistan, which will mainly be used for the export of ethanol.

There is still huge potential in these markets for tank container operators – finding a niche in China, India or Indonesia offers massive opportunity for growth. Expect to see further deals, partnerships and joint ventures announced in this region as the year develops.

Innovating for success

Technology is at the heart of improving client service in intermodal logistics, and increased investment from tank operators is starting to pay off. Bertschi has been one of the leading players, rolling out a TruckTracer App that will be used by all sub-contractors and which will produce real time data to optimise transport planning and boost visibility within the supply chain. Hoyer also grabbed a lot of headlines in January when it announced that it had transformed over 10,000 tank containers into “smart tank” units in which temperature, filing level, pressure and location could be monitored remotely. Hoyer will now be able to deliver greater safety, efficiency and, most important of all, higher-quality service to its customers.

Innovation is also becoming more open, in contrast with the separate and silo-ed approach that has held operators back in the past. For example, MRI Intermodal’s open and connected methodology means that its Intermodal Tank Operating Software uses an application program interface (API) to create an open partner network and ecosystem. This means that clients can leverage benefits from MRI’s software and gain further advantage from its growing network of partners.

In a further example of opening up the industry, participants are now using technology to develop new ways to match cargo and container. For example, Bremen based operator Leschaco has set up an independent start up, Logward GmBH, which has launched an online freight rate portal, Instant Freight Quote, that covers dangerous goods. Now in its early stages, the service includes port-to-port rates from Northern Europe to the rest of the world and makes it easy for to receive a freight rate quickly.

They are not the only matchmaking service around. A B2B platform called celebrated its second anniversary in February this year. In that time revenue has gone from $0 to $25 million in revenue in over 100 countries and the founders have now put in place a new fee structure to drive further growth on the platform and to help create a more collaborative environment in the chemical supply chain.

Composite breakthrough

Staying on the topics of innovation and collaboration, Eurotainer has made a bold move by taking delivery of new composite tankers from Omni Tanker of Australia. This year could mark the moment when the investment in composite materials pays off. New composite tanks combine high safety standards and strong chemical resistance with low tare, which provides cost savings for the client. Some can carry up to 40% more product, though in an industry that remains conservative, there are still some regulations that need to be updated.

The bottom line is that that the advantages that tank containers offer over over drums or chemical tankers for some types of cargo, which have always been there, but are now becoming more visible and undeniable and that message is now going global. As supply chains evolve, there is a great opportunity for operators to develop with them, offering more flexible services driven by technology and transparency.