TNT Tank & Trailer Repair LP is using the downturn in the energy sector to expand its footprint in Lloydminster and Grande Prairie and provide customers with new services.
The strategy focuses on expanding the existing service shop in Lloydminster into a one-stop centre for servicing TNT’s new trailer rig-ups and customer-owned trailers.
“We’ve sold a high volume of trailers in the last three years, so the shop has been very busy putting out new trailers and new rig-ups,” said Fred North, the majority owner in late August.
“By expanding the shop we’ll be able to do both in the future once things pick up again.”
A bigger shop will also help to offset a drop in sales of new tanks and trailers for a variety of industry uses by brand names such as Doepker, Tremcar, Heil and Agassiz.
Richard McKinley, a lead hand in the wash bay, cleans the mud off the back of this trailer at the TNT Tank & Trailer Repair service shop.
Construction of the shop is expected to take place over the fall and turn it into an even bigger revenue generator for the company than it is today.
“We have a lot of established customers and we’re building on it. We now do our own washing and steaming, which we never did before,” said North. “We also do our own hose testing now. That’s an added service and creates a one-stop shop when someone wants their trailer fixed.”
TNT has plans to level a seven-acre lot north of the Lloydminster shop to park more trailers.
The company has also bought land in Grande Prairie, where it plans to build a permanent sales office and another one-stop service shop when the economy stabilizes.
The immediate expansion of the Lloydminster shop will position TNT for growth when the economy turns around.
“If it turns around in three months, we would pretty much have to push our service away to just keep up to the sales,” said Scott Cable, a minority owner with input into the expansion. “So that’s why we’re expanding – so when it does turn around we can continue to do the service and do our new trailer rig-ups.”
The expansion will add six service bays and two new wash bays for a total of 14 work bays and four wash bays.
The current shop has eight service bays and two wash bays that are 25 ft. by 100 ft.
All of the bays will be extended to 125 ft. in length during the expansion to service the 53-footers from Rosenau Transport.
“We do quite a bit of work for them. Right now, we can’t back in two trailers end to end because our bays are too short,” said Cable.
“We need to expand because we have a lot of service work. We can’t keep up to the service now that we have. We just started washing our own trailers. There’s a big demand for that service. When it’s busy, sometimes there’s a two week wait to get a trailer steamed and washed out,” he added.
Trailers such as 407 sour gas sealed units must be steam-washed internally before they can be serviced safely to remove potentially dangerous gases such as H2S.
TNT started using a portable steamer, but the expansion will allow for the installation of a permanent boiler
The portable will likely go into the field to complete on-site steams and thaw frozen valves, etc. during the winter. TNT is also setting up to provide some external trailer washes as well with that one stop concept in mind.
“Basically in this downturn, you have to do what you need to do to survive and that’s what we’re going to be doing,” said Cable.
While many companies have cut staff, TNT has selectively hired some new employees.
“We’ve increased because our shop is busier now, but we decreased a couple in the office,” said North, who added, “That’s basically because we got a new computer system. We’ve been able to add some really good people we picked up that got laid off from other companies that left town and such. We have an increase in staff and better quality.”
Plans are in the works to certify the shop to service and repair vac trucks, propane trailers and LNG carriers to diversify.
The expansion plans might take some people by surprise in this down cycle, but Cable said, “Anyone in town knows Fred and knows that he’s aggressive that way. Now is the time to expand and we’ve never washed trailers before. The person that we have doing that is by far the best in the area for that type of work. He’s training some people right now.”
The expansion plans follow the recent takeover of TNT by Ventures North Financial Group, a privately held finance and leasing company located in Sherwood Park, Alta.
North is the majority owner of Ventures North, but at 69, he’s ready to let the young owners such as Cable and a few other staffers take over the helm.
“They’re going to be the future of this company. We just changed hands last fall,” said North.
North has been in the oilfield business since 1968 and has worked as crude oil hauler, a lease operator, and an owner of many companies.
He bought Temor Oilfield Services in Lloydminster in 1990 and grew it from 32 lease/operators to 149 when he sold it to the Mullen Group in 2002.
He purchased TNT in 2003 and has grown the business exponentially to have customers “everywhere from here to Fort St. John,” as he puts it.
He figures he has at least 50 trailer customers in Canada and the US.
As for the effect of the slowdown on sales and service North said, “It definitely slows everything down. It’s the same effect as everybody’s feeling in the business. We’re definitely suffering along with everybody else.”
North is resigned to the fact that he has a yard full of new and returned lease trailers that he can’t sell.
“Well there’s nothing you can do. Most of these trailers – they have to be ordered a year ahead of time, so we’re definitely caught with a lot of stock and that’s kind of normal,” he said.
“The bigger you get the harder you get hit I guess, but it’s actually gone really well for us. Quite a few of our rentals are down, of course, but we are still putting new rentals out and working with the customers to make it work for them.”
To get trailers off the property TNT has a wide variety of monthly rentals and lease-to-own programs that are generating revenue and needed work for their customers too.
“Guys don’t want to commit to buy or purchasing stuff, but they need something for a contract so a lease is definitely a good way to go for them,” said North.
“We are working with the customers and making it easier for them. The more work they can get, the more work they bring to us.”
North and his Ventures North Group of owners are bullish on the potential long-term growth market in the Grande Prairie area.
“We always had a lot of customers up in that area, so we’re going to build a shop up there. There is a lot of demand for a good shop in the area which seems to be missing,” said North.
The company purchased 20 acres across from Ritchie Bros on Hwy. 43 for a shop, with a construction start date on hold.
“We’re backing off on it a little bit until things kind of level out. We have an office in town and a sales rep up there now,” said North. “We’re going to look at it probably next year. We’ll kind of play it by ear and see what the business does. It’s a very active area up there, and it serves kind of the whole north out of there and, of course, Fort St. John.”
TNT is eyeing potential growth in LNG trailers used to haul liquid natural gas in northeastern B.C. and is also looking closely at the vac truck market.
“We’ll probably get into that once things level out a bit,” said North.
“There are a lot of customers out there that aren’t getting served in the area right now, so there’s definitely an opportunity.”
Cable noted that during the boom years, North never had the time to expand and do the things that he and the younger partners are doing now.
“It probably should have been done a while ago because service never kept up and never grew with the sales. We believe that you service what you sell,” said Cable.
“We have a lot of good people here and a lot of new clients. A lot of people kind of strayed away from us over the years with service just because they knew that how busy we were with the new trailers. There are a lot of people excited about us doing it because they know the people we have in our shop are second to none in this area.”
The shop expansion will be constructed by Ryken Construction in Nisku that does most of the construction for Ventures North.
“It’s very exciting. We couldn’t do it without the staff we have now. Without them it would be pointless to expand,” said Cable.