The Oilfield Trucking Industry Series – Part 1: Industry Challenges
Contributing authors: Keith Richard, Vice President of Operations, Managed Transportation Services and Joe Looper, Manager, Carrier Relationships & Development
Trucking in the oil and gas industry is a tough and dirty job that has been around for decades in places like South Texas. What has changed in the last ten years is the growth in the amount of trucks on the roads servicing this industry. Now that we have gone from a boom cycle – leading us to where were are today – it’s important to look at how this growth has affected the oilfield trucking industry in places like the Eagleford, Permian Basin, Appalachia, Bakken and the Gulf of Mexico (i.e., Port Fourchon), and the specific modes or types of trailers they operate.
The oil and gas industry has a very complex supply chain that requires different modes of transportation and a plethora of different asset types to accomplish various tasks. Most material used through construction, drilling, completions and production starts and is maintained using multiple types of transportation equipment for both upstream and midstream operations. But what has not been reported is specific data at the state or regional level regarding the growth and decline on the quantity of the trucking companies and the associated safety statistics, and the challenges they face to maintain operations until the next boom cycle.
Challenges Faced by Carriers
To gain greater insight into some of the challenges faced by this industry, we’ve conducted interviews with trucking companies in different regions that manage various types of trucking assets. One of the common threads in the interviews was the desire of these companies to work with the industry to proactively plan the management of their equipment in a more efficient manner.
Several carriers communicated a need to have people in leadership positions at exploration and production companies and service companies who actually understood how trucking companies operate. Carriers have reported that the recent slowdown has affected their sales by up to 40%, and that customers are routinely asking for discounts up to 30% in order to maintain business.
The carriers interviewed also cited concerns about driver shortages, electronic log mandates and the cost of equipment, while all stating a desire to partner with shippers by having more visibility to their supply chain needs in order to plan more effectively.
Strategic carrier management and technology based solutions, such as the use of transportation management software, could be bridges that lead to better efficiency and combined vision of needs between the trucking companies and their customers. Improved efficiency for trucking companies would enable them to share these benefits with their customers. Find out more in part two and three of this series still to come on Logistically Speaking!
What challenges are you seeing in the oil and gas industry?